Beaten-down lithium stocks Pilbara Minerals and Altura Mining enjoyed some good news yesterday with each inking new offtake deals for their spodumene concentrate. Shares in Pilbara lifted 5 per cent after the company announced that Chinese automaker Great Wall had signed up for early delivery of 20,000 tonnes of product a year over six years starting from next month. The company had been locked in to receive 75,000tpa of product as part of a stage two expansion of Pilgangoora that would boost the project’s output to as much as 550,000tpa. The Ken Brinsden-led miner also advised that shipped tonnes for the June quarter had come in at 43,214t, representing the higher end of previously revised guidance range of 23,000-45,000t. Pilbara had been forced to revise down its guidance last month after its customers delayed shipments because of a slower than expected ramp-up in capacity of their chemical conversion facilities in China. The news cast a pall over Pilbara’s share price in recent weeks with the stock falling to below 50¢ for the first time since September 2017. Pilbara yesterday gave September quarter sales guidance of 35,000-48,000t and said it expected sales to recover to 65,000-80,000t by the December quarter based on its latest discussions with customers. The company also cited solid progress on plans for a formal joint venture agreement with South Korean steel giant POSCO for a downstream chemical conversion facility in the country. Meanwhile, Pilbara’s neighbour Altura announced it had signed a five-year, 35,000tpa offtake deal with China’s Shandong Ruifu. The first shipment of about 8000t is scheduled for later this month with the product to be sold for between $US550/t and $US950/t. The deal helps offset 100,000tpa of product which had been destined for China’s Shaanxi J&R Optimum Energy Co, which ran into financial difficulties and could not meet its buying commitments. Altura last year negotiated for J&R to reduce its offtake from 100,000t to 50,000t but yesterday said it would terminate the revised arrangement. Managing director James Brown said the cancelling of the J&R offtake deal and its recent exit from the share register of Altura was a positive for the company given its well-publicised and long-running restructuring activities. He said Altura was continuing to progress a strategic relationship with its new major shareholder, China’s Ningbo Shanshan Co, which had picked up J&R’s 11.8 per cent stake. Altura still has about 15,000tpa of potential product to sell given its plant’s 220,000tpa nameplate capacity. Mr Brown said the performance of the plant continued to improve and the quality of its product continued to attract significant customer interest, underpinning short and long-term demand. Pilbara shares closed up 2.5¢ at 51.5¢ while Altura shares closed steady at 11.5¢. Sentiment around lithium has been soft in recent months owing to soft pricing amid fears about a glut of supply.
Australian lithium miner Pilbara Minerals has announced a deal with Chinese carmaker Great Wall for early delivery of 20,000 mt of spodumene concentrate a year for six years from August 2019. The firm previously agreed a deal with Great Wall for 75,000 mt per year for the end of Q4 2019. Pilbara shipped more than 43,200 mt in Q2 2019, against a forecast of 23,000-45,000 mt, and expects sales of up to 80,000 mt by five years. The firm is also progressing talks with POSCO about a joint venture for a chemical conversion factory in South Korea.