Australian lithium producer Pilbara Minerals (ASX: PLS) has amended a spodumene-concentrate supply deal with lithium chemicals producer Chengxin Lithium Group, raising agreed sales volumes and extending the contract duration.
Under the existing short-term agreement, signed in 2023, Pilbara Minerals committed to supply 70,000 tonnes of spodumene concentrate from its Pilgangoora mine in the 2024 financial year.
The revised agreement is for sales of 85,000 tonnes in calendar 2024, followed by 150,000 tonnes in both 2025 and 2026, which expands and extends the deal until 2026, the miner said.
Sales to Chengxin, which supplies to companies including Hyundai Motor, CATL, BYD and LG Chemical, will be made based on the prevailing market price, in line with the existing agreement, the Australian miner said.
Pilbara Minerals, Australia’s largest independent lithium miner, inked in January a similar agreement with Ganfeng, which is the world’s third largest and China’s largest lithium compounds producer.
The West Perth-based firm has been investigating how it can add value to its hard rock spodumene ore as it aims to grow its business. As part of this plan, it is building a demonstration plant to process lithium from Pilgangoora.
The technology, if powered by renewable energy, could cut carbon emissions by more than 80% in one of the most high energy steps of the lithium battery materials production process.
The plant is expected to allow Pilbara Minerals to produce one million tonnes of spodumene concentrate next year.
Shares of Pilbara Minerals rose on the news, closing 5.6% in Sydney at A$3.57. This leaves the hard-rock lithium producer with a market capitalization of A$10.74 billion ($7bn).