Alliance transfers Bald Hill lithium offtake

Singapore-Australian lithium producer Alliance Mineral Assets has transferred the lithium concentrate offtake agreement at its Bald Hill mine in Western Australia to Jiangxi Bao Jiang Lithium Industrial (JBJLIL) from Hong Kong-based trading group Burwill Holdings.

JBJLIL is a joint venture between Burwill and Jiangte Special Motor that has two plants capable of producing around 45,000 t/yr of specialised lithium products. The plant operated by JBJLIL can process around 10,000 t/month of lithium concentrate.

Alliance will supply the remaining 18,000t of lithium concentrate from 2018 to JBJLIL at a fixed price of $880/t to be shipped at the end of January. A market-linked pricing mechanism will apply from January 2019 to the end of 2022 with a lower limit of $680/t and a higher limit of $1,080/t.

The maximum lithium concentrate to be supplied under the agreement in 2019 is 100,000t with a minimum of 80,000t. The first offtake delivery of 10,000t will be made in February. The maximum is 140,000 t/yr and the minimum 100,000 t/yr between 2020-22.

Alliance is seeking new offtake partners for the remaining stage one and stage two production from Bald Hill. It expects to produce 65,000-80,000t of lithium concentrate between January-June 2019 compared with a guidance of 55,000-60,000t for July-December 2018.

"The offtake agreement transfer from Burwill to JBJLIL is a good outcome as it provides certainty for the demand of our premium quality spodumene concentrate, while freeing us up to sell approximately 50pc of our annual product to other customers," Alliance managing director Mark Calderwood said.

Alliance said October-December production was 7pc below guidance of 55,000-60,000t because of low-grade feedstock and water problems. Output of 22,750t was 20pc lower than the July-September quarter. Production returned to targeted levels in the last three weeks of 2018 and has begun 2019 in line with January-March expectations.