(Yicai) March 12 -- Australian lithium producer Pilbara Minerals has signed an agreement with Sichuan Yahua Industrial Group to supply spodumene concentrate, a mineral used to produce lithium batteries, to the Chinese lithium chemicals firm.

Pilbara Minerals' Pilgangoora Operation project will supply Yahua with 20,000 tons of spodumene concentrate this year and 100,000 tons of the mineral each year in 2025 and 2026, with an additional option of up to 60,000 tons per year, the West Perth-based company announced today.

The price of the spodumene concentrate will be set at the time of supply according to prevailing market prices, Pilbara Minerals added.

"This offtake builds on an established relationship between our companies, having previously completed a number of sales together," said Dale Henderson, managing director and chief executive officer of Pilbara Minerals. "The agreement enables Yahua to further expand its supply chain commitments with key global battery customers and builds out Pilbara Minerals’ medium-term sales profile whilst preserving long-term optionality as we assess downstream opportunities in line with our growth strategy."

"We are pleased to strengthen our relationship with Pilbara Minerals via this offtake agreement, which secures a reliable supply of high-quality spodumene concentrate over the medium term," said Meng Yan, vice chairman of Yahua. "We look forward to working with Pilbara Minerals to further enable our global customers to support the global energy transformation."

Yahua is a leading lithium chemicals company and one of the largest lithium hydroxide producers globally. It has strong connections across the lithium supply chain, with key customers including Tesla, LG Energy Solution, LG Chem, and Contemporary Amperex Technology.

Shares of Yahua [SHE: 002497] were trading down 1.2 percent at CNY11.25 (USD1.57) as of lunch break in Shenzhen today.

Editor: Futura Costaglione