Earlier this year, Australian lithium miner Core Lithium entered into a binding term sheet with Tesla for the supply of up to 110,000 tonnes of Li2O spodumene concentrate from the Finniss Lithium Project over a term of 4 years, with pricing referenced to the market price for spodumene concentrate, subject to a price floor and ceiling. (Earlier post.)
The date for concluding the deal passed on 26 October 2022 without the agreement being completed. Prices for spodumene concentrate are now averaging $5,400/mt, up from approximately US$2,900/mt in mid-March 2022, which was up from approximately $500/mt in early 2021, according to the Shanghai Metals Market.
With the recent official opening of the Finniss Lithium Mine and the underwritten share placement to fund accelerated resource definition, Core believes it is well positioned to take advantage of strong global demand and constrained lithium supply.
In early October 2022, Core completed the first sale of a spodumene DSO (direct shipping ore) product (1.4% Li2O) from the Finniss Project. The 15,000 dmt DSO sale was tendered on a CIF (Cost, Insurance and Freight) basis to several pre-screened participants active in the lithium-ion battery supply chain. Demand for the spodumene DSO material was strong, evidenced by the price achieved—US$951/dmt—the company said.
Under optimized conditions, mine ore with 1-1.5% Li2O can produce a concentrate of more than 6% of Li2O. If converted with 70% concentrate recovery rate, this lot would deliver about 300 mt of lithium carbonate equivalent (LCE).
The DSO is expected to be shipped before the end of the year, in advance of spodumene concentrate production in H1 2023. Agreements in place with Ganfeng, and Yahua bring total concentrate sales under offtake contracts to about 80% of the Finniss Lithium Project production over the first four years of operations. Global lithium demand is forecast to stay strong for the foreseeable future and Core continues to receive strong inbound interest in lithium spodumene concentrate from the Finniss Lithium Project.
I want to thank Tesla for the time taken to negotiate with Core and look forward to maintaining an open and ongoing dialogue. The recent DSO sale, predicted commencement of lithium concentrate sales in H1 2023 and an increasing lithium price environment indicate that Core Lithium is well positioned to capitalise on the high demand and current shortage of available battery grade lithium spodumene concentrate.—Core CEO Gareth Manderson
The Finniss Project lies within one of the most prospective areas for lithium in Australia’s NT—the Bynoe Pegmatite Field—and covers more than 500 km2 of granted tenements.