Australia’s newest lithium producer, Altura Mining, has secured a long-term supply deal with Chinese major Ganfeng Lithium.

The news sent shares up almost 40 per cent this morning to an intra-day high of 25c just after market open.

The deal starts this year, with Altura to supply a minimum of 8,000 tonnes of lithium from its namesake mine in 2018 and increasing supply to 70,000 tonnes each year from 2019 to 2021.

There is also the potential for extensions for up to a further 10 years.

The Altura mine in Western Australia’s Pilbara region officially opened in early September following an 18-month construction period.

The first shipment of 5,000 dry tonnes of spodumene concentrate made its way to China in early October.

Spodumene is the main lithium bearing mineral mined from most hard rock lithium mines around the world.

Altura Mining (ASX:AJM) shares took off this morning.
Altura Mining (ASX:AJM) shares took off this morning.

Altura said the new deal provides it with a more diverse customer base and locks in 100 per cent of planned production from the Altura project.

“The terms of agreement mirror the floor price component of our existing off-takes which provides us with significant security while the agreed pre-payment provides a healthy working capital buffer during the ramp-up phase,” Altura managing director James Brown said.

Altura and Ganfeng have negotiated a price range of between $US550 and $US950 per tonne of 6 per cent grade spodumene concentrate.

Altura has also agreed to let its existing off-take partner, Shaanxi J&R Optimum Energy (JRO), reduce its current minimum contract amount from 100,000 tonnes of lithium each year to 50,000 tonnes from 2019 onwards.

“The revised agreement with JRO together with the broadening of Altura’s customer base with Ganfeng’s commitment significantly addresses any implications to the off-take agreement from JRO’s restructuring activities,” Mr Brown said.

Mr Brown says Altura still continues to field inquiries regarding off-takes.