Australia's Pilbara lands new Chinese Li offtake deal

Australian lithium producer Pilbara Minerals has secured a five year offtake agreement with downstream Chinese lithium chemicals producer Yibin Tianyi.

Pilbara will supply 60,000t of lithium concentrate grading 6pc lithium oxide in 2020 and 75,000 t/yr for 2021-2024. The first shipment of 20,000t from the Pilgangoora mine in Western Australia has already been sent to China with the next shipment due in late April or early May.

Sichuan-based Yibin Tianyi is a key participant in the supply chain of Contemporary Amperex Technology (CATL), the world's largest maker of lithium-ion batteries and a shareholder of Pilbara Minerals. Yibin Tianyi plans to open a 25,000 t/yr plant in China in June with capacity to produce 25,000 t/yr of lithium hydroxide and carbonate chemicals. This capacity could be increased to 100,000 t/yr by 2022.

Pilbara Minerals has offtake agreements with China's General Lithium, Ganfeng Lithium, Great Wall Motors and CATL as well as with South Korea's Posco.

The first stage of Pilbara's Pilgangoora project has capacity to mine 2mn t/yr of ore to produce around 330,000 t/yr of concentrate, but production was moderated last year as a result of weak lithium prices and low demand. Output in January-March is expected to be at the lower end of the 35,000-50,000t range.

"Demand in the near term is likely to be tempered with consumer demand expected to remain soft in response to Covid-19," the company said.

It is progressing desktop engineering studies to increase Pilgangoora's mining capacity to 5mn t/yr, but this expansion will not occur until customer demand has increased and stage one capacity is fully utilised.

By Angus Macmillan

source: Argus Media