ioneer Ltd (ASX: INR) has signed a binding offtake supply agreement with Korean firm EcoPro Innovation Co Ltd.
The agreement is for a three-year term, in which ioneer will supply the latter with lithium carbonate from its Rhyolite Ridge Lithium- Boron Project in Nevada. The condition precedent of the Agreement is ioneer’s final investment decision (FID).
Under the Agreement, ioneer will deliver up to 7,000 tonnes per annum (tpa) of lithium carbonate to EcoPro over a three-year term. The 7,000 tpa comprises an initial and firm 2,000 tpa and an additional and optional 5,000 tpa (subject to mutual agreement, no later than Q1 2022).
EcoPro expects to convert ioneer’s lithium carbonate into high purity lithium hydroxide at its cathode plant to meet its customers’ requirements.
ioneer is expected to produce an annual average of approximately 20,600 tonnes of lithium carbonate, or approximately 22,000 tonnes of lithium hydroxide, along with approximately 174,400 tonnes of boric acid per year over the 26-year mine life.
ioneer Managing Director, Bernard Rowe, said the dual production of lithium and boric acid allows ioneer to not only produce lithium in the US, but to do so at the very bottom of the global cost curve. ioneer anticipates commencing production in late 2023.
This Agreement follows the earlier signing of an initial offtake agreement and two sales and distribution agreements for boric acid production, representing 100% of offtake in year one and more than 85% of boric acid production in years two and three.
Key terms of the Agreement with EcoPro include:
- Product: Lithium carbonate
- Contract Duration: 3 Years
- Volume: Up to 7,000 tonnes per annum with a minimum of 2,000 tonnes per annum (subject to ioneer’s FID), additional volume (5,000 tonnes per annum) by mutual agreement no later than Q1 2022 (or such later date mutually agreed by the Parties).
- Price Term: CIF Busan, Korea.
- Price: Adjusted quarterly based on agreed price formula.
- Currency: USD per metric ton
- Condition Precedent: ioneer’s Final Investment Decision
The Agreement with EcoPro marks a significant milestone for ioneer and will be a valuable partnership,” Mr Rowe said.
“It is our first lithium offtake agreement and partnering with a recognised world leader in cathode materials manufacturing is a testament to the quality of our lithium carbonate. Following a pilot plant tour in mid-2019 and detailed testing of our product samples, we are pleased that EcoPro found that our materials meet its exacting standards and determined that ioneer was the right partner to support EcoPro’s strategy for producing battery grade lithium hydroxide.
“Equally important is ioneer and EcoPro’s shared focus on sustainability. EcoPro is committed to the production of technologies that reduce emissions, and ioneer is empowering EcoPro through the production of these critical minerals with a significantly lower carbon footprint.”