A Chinese battery supplier which lost a 19.9 per cent placement deal with Argosy Minerals now wants to cancel a sales agreement with the lithium play.

But Perth-based Argosy (ASX:AGY) has said ‘no way’.

Qingdao Qianyuan High-tech New Material Co asked Argosy to terminate a purchase agreement for battery-grade lithium from Argosy’s flagship Rincon lithium project in Argentina.

The deal was worth $9.55 million to Argosy in an upfront payment.

Argosy has told Qianyun it will not accept the termination request — and is seeking to hold talks with the company.

“The company maintains its position that, until they are validly terminated or amended, the off-take [sales] agreements remain in effect and are not conditional on completion of the placement agreement and do not confer termination rights on Qianyun without cause,” Argosy told investors.

“The company confirms that the off-take agreements provide for customary dispute resolution and arbitration mechanisms to resolve disputes, which the company may consider should it be unable to reach an agreement with Qianyun.”

The news comes after Argosy swapped a 19.9 per cent placement with Qianun for a $15 million placement and $2 million share purchase plan.

The placement, to institutional and sophisticated investors, was heavily oversubscribed.

Strong investor interest spurred Argosy to undertake the placement, which was on better terms than the Qianyun deal and avoided time-consuming Chinese regulatory approvals.

Argosy shares last sold at 25.5c before a trading halt.