Pilbara Minerals and Yahua sign three-year offtake agreement

Pilbara Minerals (ASX: PLS) and Sichuan Yahua Industrial group have signed a three-year offtake agreement for the supply of spodumene concentrate from the Pilgangoora lithium operation in WA.

Leading lithium chemicals company, Yahua is one of the largest lithium hydroxide producers in the world. The company has strong connections across the lithium supply chain with customers including Tesla, Contemporary Amperex Technology Co, LG Energy Solutions and LG Chem.

The first year of the agreement will see Pilbara Minerals supply 20kt of spodumene concentrate, with an option to supply an additional 60kt, for a total supply of 20kt to 80kt in 2024.

In 2025, Pilbara Minerals will supply between 100kt to 160kt of spodumene concentrate with an initial supply of 100kt and the option to supply an additional 60kt.

The final year of the agreement will see Pilbara Minerals supply an initial 100kt with an option to supply up to a further 60kt for a total of 100kt to 160kt.

Pilbara Minerals managing director and chief executive Dale Henderson says the company is delighted to have signed the agreement with Yahua.

“This offtake builds on an established relationship between our companies, having previously completed a number of sales together,” he said.

“The agreement enables Yahua to further expand its supply chain commitments with key global battery customers and builds out Pilbara Minerals’ medium-term sales profile whilst preserving long-term optionally as we assess downstream opportunities in line with our growth strategy.”

Consistent with existing agreements, all spodumene concentrate volumes will be sold based on the prevailing market price.

Yahua vice chairman Meng Yan commented on the partnership.

“We are pleased to strengthen our relationship with Pilbara Minerals via this offtake agreement which secures a reliable supply of high quality spodumene concentrate over the medium term,” he said.

“We look forward to working with Pilbara Minerals to further enable our global customers to support the global energy transformation.”