ioneer Ltd (ASX:INR) has signed its first binding offtake agreement for the supply of 105,000 tonnes of boric acid per annum for five years.
Notably, this represents over half the expected boric acid annual production from Rhyolite Ridge.
The agreement is with Chinese boron company Dalian Jinma Boron Technology Group Co. Ltd, a top 500 Chinese private enterprise that operates one of the most complete boron industrial supply chains in the world.
The agreement is conditional on ioneer making a positive final investment decision, expected in early 2021.
Another significant milestone for ioneer
ioneer’s managing director Bernard Rowe said: “Signing our first large-volume offtake agreement with a major global customer is a significant milestone for ioneer.
“It validates the strong demand we see for our premium quality boron products.
“Jinma is intricately involved in all aspects of the boron supply chain which makes them an excellent first customer for ioneer.
Agreement will help with securing financing
“The addition of Jinma as a customer validates the quality of our product and will also help position ioneer ahead of securing financing, as we move Rhyolite Ridge toward production.
“The ability to secure significant contract demand demonstrates to the market our confidence in ioneer becoming a major, low cost, US producer of lithium.
“ioneer looks forward to updating the market further regarding the progress of negotiations in relation to its global sales and marketing plans for the Rhyolite Ridge lithium and boron off-take in the near term.”
Agreement pricing based on market rates
Supply of boric acid will be based on prevailing market prices for similar volumes and quality and remain at a fixed price for the first six-months of delivery with regular price adjustments thereafter.