Australian lithium miner PLS Group signs supply deal with China’s Canmax

PLS Group said on Tuesday that it has signed a two-year offtake deal to supply 150,000 tons of spodumene concentrate to Chinese lithium battery materials maker Canmax Technologies, sending shares of the Australian miner higher.

Shares of the lithium miner rose as much as 5.3% to A$4.39, as of 00:20 GMT, and were on pace for their strongest trading session since January 6, if gains hold. The stock is among the top performers in the broader ASX 200 index, which was marginally up 0.3%.

PLS, formerly Pilbara Minerals, said the parties agreed to a floor price of $1,000 a ton, based on spodumene concentrate containing 6% lithium (SC6), a semi-processed material derived from separating lithium-bearing minerals from ore.

Outside of this floor, the final price will be indexed to prevailing market rates – a structure the miner said provides downside protection in volatile conditions while preserving full exposure to price upside.

A boom in battery storage has bolstered the lithium demand outlook this year, driving hopes for an accelerated turnaround for producers, who have been struggling with an oversupply-driven slump in prices since late 2022.

In its quarterly production report last month, PLS flagged a possible restart of its Ngungaju plant in Western Australia due to strong inbound interest in offtake volumes, with a decision expected in the next quarter.

The agreement for spodumene concentrate, used to make lithium chemicals for electric-vehicle batteries, will start in 2026 and includes an option to extend for a further 12 months, PLS said.

The miner added that the deal is conditional on the receipt of a $100 million unsecured, interest-free prepayment.

For Canmax, the latest offtake deal for the lithium product follows an agreement struck in December with Australian miner Liontown.

(By Nikita Maria Jino; Editing by Vijay Kishore and Sherry Jacob-Phillips)