Pilbara Minerals expands supply deal with China's Ganfeng

The news: Lithium producer Pilbara Minerals has expanded an offtake agreement with China’s Ganfeng to supply more spodumene concentrate to one of its biggest customers.

The numbers: Pilbara currently supplies Ganfeng 160,000 tonnes of spodumene concentrate per annum. Under the revised agreement, it will supply an additional 150,000 tonnes in 2024, and an additional 100,000 tonnes (with an option for a further 50,000 tonnes) in both 2025 and 2026. All sales will be made at the prevailing market price, it said.

The context: The deal to supply additional volumes for the raw material used for the lithium chemical in EV batteries, comes as a boost for Pilbara at a time when lithium prices have slumped globally. The company said it is separately continuing to progress a strategic partnership process with Ganfeng, which is targeted to conclude in the March quarter.

“This increase demonstrates the demand for Pilbara Minerals’ spodumene concentrate while preserving optionality for the Company as we assess long-term downstream opportunities in-line with our growth strategy,” Chief executive Dale Henderson said.