(Reuters) - Lithium miner Altura Mining Ltd said on Thursday it has signed an agreement to supply lithium to Chinese battery maker Guangdong Weihua Corp, amid a decline in prices for the product.
Under the five-year binding offtake agreement, Altura will supply 50,000 dry metric tonnes of lithium concentrate per annum to the Shanghai-listed company, it said in a statement.
The agreement, the latest to lock up supply from Australia’s eight or so lithium producers and the first by Guandong Weiha, comes at a time of depressed prices due to oversupply following a change by China to its EV subsidy regime.
Altura’s shares jumped 10% in early trade, posting their biggest intraday percentage gain in over 5 weeks, in a slightly weaker broader market.
Earlier this week, the company reported robust production for the June quarter, churning out 42,402 wet metric tonnes of spodumene concentrate - a key ingredient in battery making - against the 29,627 wet metric tonnes it produced in the March quarter.
All of Altura’s current lithium offtake agreements are with Chinese firms, with Guangdong Weihua the fourth after Ganfeng Lithium, Lionergy and Shandong Ruifu.
The latest deal comes amid interest from battery makers in securing long-term agreements during the price downturn, ahead of an expected recovery into the next decade as EV sales boom.
In late July, Altura’s key shareholder Ningbo Shanshan Co Ltd raised its stake through a share placement, giving it 19.4 percent of Altura.
Reporting by Rashmi Ashok in Bengaluru; editing by Richard Pullin