Hong Kong’s Burwill Lithium Co has agreed to
transfer the rights and obligations of the long-term lithium
offtake agreement it has with Australia’s
Alliance Mineral Assets for the purchase of spodumene from
its Bald Hill Mine in Western Australia to
China’s Jiangxi Bao Lithium Industrial,
effective from January 14.
As part of the new offtake agreement, the two parties have
established a market-linked pricing mechanism with a $680-1,080
per tonne price range for minimum 6% lithium concentrate
produced at the Bald Hill Mine. The agreement is for the period
January 14, 2019, to December 31, 2022.
Before the new agreement, the Bald Hill Mine production price
was fixed for two years at $880 per tonne on an fob
If the parties do not agree on a specific price within the
agreed range of $680-1,080 per tonne, the material will be
purchased at the higher price of $880 per tonne on an fob basis
or a floating price will be chosen.
The pricing formula agreed will also be based on the lithium
carbonate average monthly price until October-December 2019;
after which both lithium carbonate and hydroxide prices will be
used as price references.
The remaining 18,000 tonnes of Bald Hill 2018 lithium
spodumene production, which totaled close to 70,000 tonnes,
will be sold to Jiangxi Bao Lithium at $880 per tonne on an fob
Lithium carbonate price fluctuations in China over the past
year led to lithium hard rock miners establishing floor and
ceiling prices from which to base their spodumene price, to
protect both producers and consumers from lithium price
Lithium carbonate prices in China, which are typically used
to calculate lithium spodumene prices, have fallen 50.31%
between January 2018 and the start of 2019.
Seeking new offtake partner
Exclusivity and pre-emptive rights have been excluded from
the new offtake agreement and Alliance is seeking a new offtake
partner to purchase the remaining stage 1 and 2 lithium
"We continue to see a high level of interest in the premium
spodumene concentrate that Bald Hill produces, and this demand
coincides well with our projected increases in lithium
concentrate production from [the third quarter of] 2019,"
Alliance Mineral aims to produce 65,000-80,000 tonnes of
lithium spodumene between January and June 2019, having
committed 80,000-100,000 tonnes of this material to Jiangxi Bao
Lithium in 2019.
The company also committed to supply 100,000-140,000 tonnes
of lithium spodumene for each year from 2020 to 2022 to Jiangxi
Bao Lithium, depending as well on the latter’s
Alliance Mineral expects to have combined production of
180,000 tpy of lithium spodumene concentrate, min 6%, from
stage 1 and 2 of the project in 2019, rising to 240,000 tpy in
The Bald Hill lithium-tantalum mine was previously jointly
owned by Alliance Minerals and Tawana Resources. Alliance
acquired all of Tawana’s share on December 4,
Australian lithium producer Aliance Mineral