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Altura Mining (ASX:AJM) - Managing Director, James Brown
Managing Director, James Brown
Source: Finance News Network
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  • Altura Mining (AJM) has secured a contract and a five-year binding offtake agreement (BOA) with Ningbo Shanshan’s subsidiary, Hunan Yongshan Lithium
  • Shanshan is considered a global leader in the lithium battery market and is also Altura’s second-largest shareholder, with a 15.1 per cent stake
  • From January 2021, Altura will supply lithium concentrate to Shanshan’s new lithium chemic plant
  • From the year after, Altura will need to supply a minimum 60,000 dry metric tonnes (dmt) of lithium concentrate
  • Further, the one-year contract will have Altura supply 44,000 dmt to provide feedstock for plant commissioning and ramp-up
  • Altura is up a healthy 19.6 per cent and shares are trading for 6.7 cents each

Altura Mining (AJM) has secured a contract and a multi-year, binding offtake agreement (BOA) with Ningbo Shanshan’s subsidiary, Hunan Yongshan Lithium.

Shanshan is considered a global leader in the production and sales of anode and cathode material to the lithium battery market. It is also Altura’s second-largest shareholder with a 15.1 per cent stake.

The five-year offtake agreement will commence in January 2021 and will see Altura as a key supplier to Shanshan’s new US$300 million (approximately A$437.46 million) lithium chemical plant with a planned phase one production capacity of 25,000 tonnes per annum lithium carbonate equivalent (LCE).

The plant began construction in April this year and will eventually include a phase two expansion to take overall output to 45,000 tonnes per annum LCE.

Pricing under the BOA is on a cost, insurance and freight basis linked to Altura’s production costs through a pricing formula. This formula is also adjusted for spodumene concentrate quality, with extra product supplied to be sold at an agreeable market price.

In years two to five, being 2022 to 2025, there’ll be a confirmed minimum annual quantity of 60,000 dry metric tonnes (dmt) of SC6.

The BOA also includes options to increase supply to 120,000 dmt per annum.

“This latest offtake agreement is the result of months of close discussions with Shanshan to ensure they get exactly what they need to support their new lithium chemical plant,” Altura Managing Director James Brown said.

“Shanshan believe they have partnered with a reliable and long-term supplier of quality spodumene concentrate. Further, they have seen Altura’s performance in the recent declining market as a testament to Altura’s market-leading operation,” James claimed.

In relation to the contract that has. also been signed, Altura has been selected to provide 44,000 dmt of six per cent grade spodumene concentrate (SC6).

The company will supply the products under the contract and BOA from its Altura Lithium Project at Pilgangoora in the Pilbara region of Western Australia.

Altura is up a healthy 19.6 per cent and shares are trading for 6.7 cents each at 10:49 am AEST.

AJM by the numbers
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