Canada-focused lithium miner gets price floor for supply deal

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Photo by MATHIEU DUPUIS/SAYONA/AFP via Getty ImagesNorth America-focused Elevra Lithium Ltd. secured a price-floor structure in a deal to supply a new processing facility in Canada, as western countries seek to bolster their critical-mineral supply chains.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe Sydney-listed company will supply spodumene concentrate from its project in Quebec to Mangrove Lithium’s planned conversion plant, according to a statement on Friday. The agreement provides a price floor set above the expected cost of production, but no ceiling, it said, without disclosing the sum.Countries around the world have been stepping up their efforts in recent years to develop lithium-refining capacity in a bid to reduce their reliance on production in China. There’s rising global demand for the commodity given its use in energy-storage systems, although prices have been very volatile.The critical-minerals industry, including lithium miners, has been calling for mechanisms such as floor prices to ensure the long-term viability of their mines. In February, Australia’s PLS Group Ltd. signed a spodumene concentrate offtake agreement with Canmax Technologies Co. that had a floor.“We do expect this type of pricing structure to be the standard moving forward,” Annie Liu, Mangrove’s chief commercial and strategy officer, said in an interview. “Hard-rock assets are in demand for the foreseeable near future, and it does take a long time to develop a brand new asset.”Elevra will supply all of the feedstock needed for Mangrove’s 20,000 ton-a-year lithium carbonate equivalent conversion facility, according to Liu. The project — which is still subject to a final investment decision — is expected to get further support from Export Development Canada and the Canada Growth Fund, alongside other potential funders, she added.“The trend is very clear that all regions would like to preserve and secure their national security on critical minerals,” Liu said. Downstream processing is the key step in building an “offshore-from-China” supply chain, she said.Elevra Lithium shares, which have more than doubled over the past 12 months, rose as much as 6.1 per cent on Friday.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.