Amid a global rush to secure lithium supplies, Chinese company Ganfeng Lithium has signed a long-term agreement with South Korea’s Hyundai Motor Company to supply battery-grade lithium hydroxide. Marking a strategic collaboration between the two entities, Ganfeng will supply Hyundai from 1 January 2024 until the end of 2027.
There has not yet been an announcement in regard to the supply quantity during the near four-year agreement, however, it has been stated that the actual purchase quantity will be subject to the final purchase order. The sales price of the products will be determined according to the pricing formula agreed upon.
Ganfeng Lithium is a one of the world’s leading lithium salt producers and has been expanding its smelting capacity, securing upstream resources and signing long-term contracts with downstream consumers. The company has secured long-term orders from Volkswagen, BMW Group, and Tesla, among others.
This type of move between suppliers and end users is increasing in popularity across the industry, typically avoiding producers of cathode material and electric vehicle (EV) batteries.
The deal represents the first of its kind between Hyundai Motor and Ganfeng Lithium, which the latter has been scouting automakers in recent years. The agreement will meet Hyundai’s demand for lithium that is a crucial raw material for EV battery production. The contract would also sustain Ganfeng’s profitability and long-term growth, according to the company.
The firm also recently revised its offtake agreement with Pilbara Minerals Ltd. to secure more lithium-bearing spodumene concentrate from Australia. Pilbara will increase sales over the next three years to Ganfeng with the option to further boost material sold.
This year, Pilbara will supply an extra 150Kt of spodumene concentrate to Ganfeng, resulting in a total of 310Kt in 2024. In 2025, the company will supply a further 100Kt, with an option to increase to 150Kt at Pilbara’s mineral election, taking the total supply to 260Kt- 310Kt that year.
In 2026 (the final year of the deal), Pilbara will supply another 100Kt, with the same option to increase to 150Kt, resulting in a total supply of 260Kt- 310Kt.
“The expanding of our current offtake agreement with Pilbara Minerals marks another important step to further strengthen our valued partnership,” commented Ganfeng president and vice chairman, Wang Xiaoshen. “The increased supply…demonstrates our strong commitment to support the growth of our global customers through the creation of cost-competitive and high-quality lithium raw materials.”
Source: The Assay
