Western Areas Signs New Nickel Offtake Deals

Western Areas (ASX:WSA,OTC Pink:WNARF) announce the award of new offtake contracts with BHP Billiton Nickel West Pty Ltd and Jinchuan Co. Ltd for the company’s high grade Forrestania nickel operation concentrate product. The new contracts follow the successful completion of a highly competitive tender process that has resulted in improved commercial terms compared to current offtake agreements.

Highlights are as follows:

• The Nickel West contract is a new agreement, rather than an extension of the previous arrangement that completes on January 31, 2020. The key terms of the new contract include:
• Contract period – three years from February 1, 2020 or until completion of the aggregate quantity;
• Quantity – 10,000 tonnes of nickel contained in concentrate per annum with a 30,000 tonne, aggregate limit;
• Delivery – bulk logistics to Kambalda, consistent with arrangements already in operation; and
• Other commercial terms – payable rates are subject to customary confidentiality clauses, all other terms are in line with industry standard for such agreements.
• Jinchuan contract period – two years from February 1, 2020 or until completion of the aggregate quantity;
• Quantity – 10,000 tonnes of nickel contained in concentrate per annum with a 20,000 tonne, aggregate limit;
• Optional extension – the contract can be extended, by mutual agreement, for a further twelve month period at an aggregate nickel quantity to be agreed between the company and Jinchuan;
• Delivery – CIF into China, utilising the already established logistic process; and
• Other commercial terms – payable rates are subject to customary confidentiality clauses, all other terms are in line with industry standard for such agreements.

Dan Lougher, managing director, commented:

The company is very pleased with the execution of the new agreements that extend our long and mutually beneficial relationship with Nickel West and reintroduces Jinchuan as an offtake customer following completion of the Tsingshan contract as at January 31, 2020.

It is notable that both of our offtake customers are involved in the downstream operation of nickel smelters. Western Areas firmly believes that the smelting of concentrates is a key process to continue to feed both the emerging electric vehicle battery market, via nickel sulphate, and the traditional stainless steel market.

Click here to read the whole Western Areas (ASX:WSA,OTC Pink:WNARF) press release.