Pilbara Minerals (PLS) has executed a binding offtake agreement with Chinese lithium chemicals manufacturer Canmax Technologies, reinforcing the company’s footprint in the supply of battery metals.

Under the multi-year agreement, PLS has agreed to supply 150,000 tonnes of spodumene concentrate to Canmax every year, with an option to supply additional volumes. The agreement includes built-in pricing protections to hedge downside risk and preserves upside exposure to improving market rates.

Canmax is a diversified industrial group and one of the world’s leading manufacturers of lithium-ion battery materials.

A standout feature of the arrangement is a floor pricing mechanism, which provides PLS with downside revenue protection should benchmark spodumene contract levels soften, while still allowing participation in stronger pricing environments.

The company will receive $US100 million ($A141m) without interest costs, demonstrating Canmax’s conviction as a long-term partner, and further enhancing PLS’ position in the market.

It’s understood PLS will supply the offtake commitments from its Pilgangoora operation, which includes both the Pilgan plant and Ngungaju plant.

Based on planned production and existing sales commitments, PLS has uncontracted capacity available from the Pilgan Plant to supply up to 100% of its contracted offtake volumes inclusive of the Canmax tonnes, according to a company statement.

“This agreement builds on our established relationship with Canmax and reflects both the quality and consistency of Pilgangoora’s spodumene and PLS’ proven capability as a reliable, large-scale operator,” PLS managing director Dale Henderson said.

“Deepening our partnership with Canmax further diversifies our customer base and reinforces PLS’ position as a leading, reliable supplier at scale to the lithium materials market.”

The agreement provides the supply of spodumene concentrate through to mid-2028, with the option of extending by another 12 months.

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