Via a new binding offtake agreement with Ganfeng Lithium (SZSE:002460) subsidiary GFL International, Altura Mining (ASX:AJM) has accounted for 100 percent of planned production from its Altura lithium project.

Through the agreement, supply to GFL is set to begin in 2018 with a minimum commitment of 8,000 dry metric tonnes (dmt). Going forward, the three-year contract will see Altura provide a minimum of 70,000 dmt per year of 6-percent grade spodumene concentrate.

GFL will have the option to extend the agreement an extra five years at the end of 2021, with an additional five-year extension also available by mutual agreement between both companies.

“Ganfeng is one of the largest and most respected lithium companies in the world and an offtake agreement with them is further proof of the quality of the product we are producing from the Altura Lithium operations,” Altura Managing Director James Brown said in a statement.

“The terms of agreement mirror the floor price component of our existing offtakes which provides us with significant security while the agreed pre-payment provides a healthy working capital buffer during the ramp-up phase,” he added.

The agreement also gives GFL the option to buy any additional spodumene concentrate produced during stage one, and the option to increase supply through access to 50 percent of spodumene concentrate produced during stage two’s expansion.

Altura has also reached an agreement with its pre-existing offtake partner Shaanxi J&R Optimum Energy (JRO), under which JRO will reduce its offtake agreement commitment from a minimum of 100,000 tonnes per annum (tpa) to 50,000 tpa from 2019 onwards.

“The revised agreement with JRO together with the broadening of Altura’s customer base with Ganfeng’s commitment significantly addresses any implications to the offtake agreement from JRO’s restructuring activities,” Brown said.

The Altura lithium project is located in the Pilgangoora area of Western Australia, and has a production capacity of 220,000 tpa of spodumene concentrate.

The company completed a definitive feasibility study in April on a possible stage-two expansion that would increase capacity to 440,000 tpa; a final investment decision is due after stage one operations and production ramp up are reviewed.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.