Trafigura secures access to lithium from EnergyX
Commodity trader Trafigura has signed a binding 10-year offtake agreement with EnergyX for 100,000 tonnes of battery-grade lithium products from its projects in the USA and Chile. A significant portion of the lithium is to be supplied to US battery plants.
EnergyX lithium project in Chile
Image: EnergyX
Through an agreement with EnergyX, Trafigura has once again secured access to battery-grade lithium. This follows a binding offtake agreement signed in March with Smackover Lithium for the supply of battery-grade lithium carbonate from the South West Arkansas Project, involving a volume of 80,000 tonnes over ten years.
The agreement with EnergyX is a big deal too. Trafigura has secured 100,000 tonnes of lithium products over ten years, sourced from two projects. This means Trafigura will obtain lithium carbonate from EnergyX’s Black Giant project in Antofagasta, Chile, as well as lithium hydroxide from the Lonestar project in Texas, USA. Lithium carbonate is typically used as a precursor for LFP cathodes, while lithium hydroxide is more commonly used for NMC and NCA cathodes.
Trafigura has committed to purchasing 66 per cent of the offtake volume from the first phase of Black Giant and 30 per cent of the offtake volume from the first phase of Lonestar. A significant portion of these volumes will be used to supply the US battery industry, according to the company.
Lithium offtake deal worth around USD 2 billion
According to EnergyX, the agreement is valued at more than two billion US dollars based on current lithium market prices. What remains unclear is whether Trafigura will pay spot market prices or if the two companies have agreed on a fixed price tier. Both companies have declined to comment on the matter.
“Offtake agreements are among the most important steps in taking a lithium project from development to production,” said Teague Egan, founder and CEO of EnergyX. “A long-term purchase commitment from a counterparty of Trafigura’s scale and credit quality shows that the market wants EnergyX’s product. It also gives lenders and investors the revenue visibility they need before committing capital to commercial construction.”
Strengthening the US battery supply chain
Daniel von Arx, Head of Battery Metals at Trafigura, added: “We are pleased to support EnergyX as it develops its lithium projects in Chile and the US. Long-term offtake is an important step in moving projects into production, and this agreement reflects our ability to help bring strategic critical minerals projects online and build secure, diversified supply chains. Drawing on our logistics network and market expertise, we look forward to supplying these battery-grade lithium products to customers, supporting supply chains for the US automotive and energy storage industries.”