Bacanora Lithium has reached an in-principle deal to extend its lithium offtake agreement with Japanese battery chemicals trader Hanwa by an additional five years.
Under the terms of the deal, Hanwa is entitled to receive 17,500tpa of lithium carbonate during the extended offtake period.
The agreement underpins the expansion of Bacanora’s Sonora lithium project in Mexico to 35,000tpa in two phases.
In the first phase, a 17,500tpa plant will be constructed, while the second phase will expand the capacity to 35,000tpa.
The company intends to begin construction of a fully integrated lithium carbonate operation.Construction is scheduled to begin later this year and the plant is expected to be commissioned in 2020.
Bacanora Lithium CEO Peter Secker said: “To maximise these strong value prospects we are focused on fast-tracking the project into production with preliminary site access developments underway and the chemical processing plant construction due to commence later this year.
“In support of this, we have agreed in principle to extend the initial lithium offtake partnership with Hanwa for a further five years at a rate of 17,500tpa and are expecting to complete formal documentation shortly.”
Discussions are ongoing for additional strategic partners for the extra Stage 2 offtake tonnages.
The front end engineering design (FEED) for the project is currently ongoing and the company expects to complete final designs, cost estimates and process guarantee scopes by the end of the second quarter of this year.
Bacanora noted that the FEED of the roaster/kiln and the crystalliser/evaporation/IX are at an advanced stage following the delivery of bulk lithium samples from Sonora to vendors.
The project is expected to cost $450m, which the company will raise through debt and equity project financing.