BY MTHANDAZO NYONI
AFRICAN lithium company, Prospect Resources (Prospect) has signed an offtake agreement with Belgium-based Sibelco N.V (Sibelco) for ultra-low iron petalite production from the Arcadia Lithium Project.
The signing of an offtake agreement follows the memorandum of understanding announced on April 15 2020, Prospect said in a statement.
“The seven-year agreement is for up to 100 000 dry metric tonnes (dmt) per annum of high quality, ultra-low iron petalite concentrate (product), resulting in a total of up to 700 000 dmt over the lifetime of the contract,” the company said.
“The pricing formula for the agreement is linked to the end customer sales contracts with minimum pricing provisions. 100% of the company’s 2019 DFS petalite production for the first seven years is now covered by offtake agreements.”
Prospect managing director Sam Hosack said once in production, the company would be the largest ultra-low iron petalite producer in the world.
“Sibelco is the largest distributor of ultra-low iron petalite in Europe and possibly the world and we believe that this is the largest ultra-low iron petalite offtake agreement ever signed. Sibelco is a global industrial minerals business with annual turnover of some €3,5 billion,” he said.
Some of the key terms of the Sibelco offtake agreement include seven years from declaration of commercial production and an annual supply of up to 100 000 dmt per annum of ultra-low iron petalite concentrate.
“The parties will annually agree binding delivery quantities, pricing and end-customer contract terms for the following year; parties to share end-customer sales receipts in agreed proportions after recovery of their respective costs,” it said.
“Prospect may terminate the contract if Sibelco does not purchase at least 10 000 tonnes of Product in each of two successive quarters for any reason other than that the global market price for petalite is below an agreed price level. Sibelco may terminate the contract if Prospect does not meet the agreed production levels of Product for two successive quarters,” the statement said.
Sibelco is a global industrial minerals solutions company founded in 1872, initially supplying silica sand from deposits in Flanders to Belgium’s major glass producers.
It operates 174 production sites in more than 30 countries, with a team of over 8 500 people. Sibelco’s main products are silica, high purity quartz and speciality minerals such as petalite.