Pilbara Minerals Amplifies Ganfeng Offtake Agreement: A Strategic Move in Lithium Market

In a significant development in the lithium industry, Australian lithium producer Pilbara Minerals Limited (ASX: PLS) has announced a substantial amendment to its existing offtake agreement with Ganfeng Lithium Group Co. Ltd, a global leader in lithium chemical conversion.

Expansion of Offtake Agreement: Increased Supply Commitments

Under the amended agreement, Pilbara Minerals will notably increase its supply of spodumene concentrate to Ganfeng. This change is a substantial escalation from the original 2017 agreement, wherein Pilbara Minerals committed to supplying 160,000 tonnes per annum (ktpa) from its Pilgangoora Operation.

Detailed Supply Breakdown

CY24: An additional 150kt, bringing the total to 310kt.
CY25: An additional 100kt, with an option to increase to 150kt, totaling 260kt - 310kt.
CY26: A similar increment as in CY25.

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The pricing of these volumes remains tethered to the prevailing market price, aligning with the terms of the original agreement.

Strategic Partnership Continuation

This increased supply to Ganfeng is a separate development from the Company's ongoing strategic partnership process, which is expected to conclude in the March quarter of 2024.

Executive Perspectives: Dale Henderson, CEO of Pilbara Minerals

Henderson expressed enthusiasm about expanding the company's relationship with Ganfeng, noting their role as a significant player in the lithium-ion supply chain and highlighting their over 20 years of experience in the industry. He emphasized that this increase in supply underscores the demand for Pilbara Minerals’ product while allowing the company to evaluate long-term downstream opportunities.

Wang Xiaoshen, Vice Chairman of Ganfeng Lithium

Wang articulated the significance of this expanded agreement in strengthening the partnership with Pilbara Minerals and underscored Ganfeng's commitment to delivering high-quality, cost-competitive lithium raw materials to the global market.

About Pilbara Minerals

Pilbara Minerals is a front-runner in the ASX-listed lithium sector, owning the world’s largest independent hard-rock lithium operation in Western Australia's Pilbara region. The Pilgangoora Operation produces both spodumene and tantalite concentrates. Its operation scale and quality have attracted global partners like Ganfeng Lithium, General Lithium, POSCO, and Yibin Tianyi.

About Ganfeng Lithium

Ganfeng Lithium, established in 2000, is a diversified global leader in the lithium value chain. The company's portfolio includes lithium chemicals, metals, and batteries. Listed on the Shenzhen Stock Exchange and Hong Kong Stock Exchange, it is among the largest lithium chemical processors worldwide, with advanced lithium extraction technology.

Production Targets and Expansions

Information regarding production targets and expansions in the Pilgan Plant's capacity for the P680 and P1000 projects is underpinned by existing Ore Reserves, compliant with the JORC Code (2012 Edition) and released on 24 August 2023. The Company has confirmed that there is no new information affecting these estimates and that all assumptions and parameters remain valid.

This expansion of the offtake agreement between Pilbara Minerals and Ganfeng marks a significant milestone in the lithium industry, reflecting both companies' commitment to strengthening their positions in the rapidly growing global lithium market. The agreement not only enhances the partnership between the two companies but also signals confidence in the future demand for lithium, a critical component in the burgeoning renewable energy and electric vehicle sectors.

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