Lithium miner Pilbara Minerals said on Tuesday it had signed an agreement with Sichuan Yahua Industrial Group for the supply of spodumene concentrate from its Pilgangoora operation in Western Australia.
Shares of the Australian lithium miner rose as much as 4.8% to A$4.19 in tandem, outperforming a 0.3% gain in the broader index S&P/ASX 200.
Spodumene is a mineral with a high concentration of lithium, a key component in the production of batteries for electric vehicles.
Pilbara has agreed to supply spodumene at market price in an agreement signed for three years, the company said.
The Yahua Industrial Group has strong connections across the lithium supply chain with key customers, including Tesla , LG Energy Solutions, LG Chem and Contemporary Amperex Technology.
Pilbara Minerals plans to supply between 20,000 metric tons and 80,000 tons of spodumene concentrate to Yahua in 2024, it said, adding that it would eventually increase its supply between 100,000 tons and 160,000 tons in 2025.
“The agreement enables Yahua to further expand its supply chain commitments with key global battery customers and builds-out Pilbara Minerals medium-term sales profile whilst preserving long-term optionality,” Pilbara Managing Director and CEO Dale Henderson said.
“By leveraging Yahua’s extensive global supply chain network, the Aussie miner will not only gain access to a wider market but, more importantly, bolster its resilience against current headwinds in the lithium market,” said Hebe Chen, market analyst at IG Markets said.
