Alita Resources sold lithium concentrate below floor price amid challenging conditions

SINGAPORE - Alita Resources said it had on Monday (Aug 19) completed a shipment to buyer Jiangxi Bao Jiang Lithium Industrial Limited for around 10,500 dry metric tonnes (dmt) of lithium concentrate at a price below the previously announced floor of US$680 per dmt.

This is was in order to continue monetising its product stockpile amid challenging market conditions for spodumene, the lithium miner said on Tuesday in a regulatory update.

Around 14 per cent of the price was also deferred for approximately six months from the shipment date, compared with 11 per cent for the previous shipment made to Jiangxi Bao Jiang at the start of August. The previous shipment price was also within the previously announced price range, which has a lower limit of US$680 per tonne and a cap of US$1,080 per tonne.

Alita said both deferrals may be set off against the balance of the prepayment from Jiangxi Bao Jiang under the offtake contracts if not paid by the buyer by their respective due dates.

It added there are continued discussions with Jiangxi Bao Jiang regarding the restructuring of the offtake agreement which include terms of the prepayment. This is also part of the broader company refinancing proposals.

Alita had in January restructured offtake agreements with Burwill Lithium to provide for market-linked pricing and the right to sell to other customers.

This saw Burwill Lithium transferring its rights and obligations as the buyer in the existing long-term offtake agreements to Jiangxi Bao Jiang, a 50-50 joint venture between Burwill Lithium and Jiangte Special Electric Motor.

Jiangxi Bao Jiang also operates one of three large lithium convertors at Jiangte's facility in Jiangxi.

The amended agreements came with a market-linked pricing mechanism, subject to a lower limit of US$680 per tonne and a cap of US$1,080 per tonne for the remaining term ending on Dec 31, 2022. In addition, the agreements provide for a commitment of 80,000 to 100,000 tonnes of lithium concentrate supply in 2019 and 100,000 to 140,000 tonnes per year between 2020 and 2022.

Alita Resources shares have been suspended since Aug 14. Prior to the suspension, the counter closed flat at 8.2 cents on Aug 12.