Prairie Lithium’s 150 TPA Lithium Crystallite Supply Deal with Hydro Lithium Signed
Prairie Lithium has locked in a decade-long agreement to supply lithium-bearing crystallite to Hydro Lithium’s South Korean refinery, marking a strategic step in its commercial-scale production and market entry.
- 10-year offtake heads of agreement signed with Hydro Lithium
- Initial supply up to 150 tonnes per annum lithium carbonate equivalent (LCE)
- Potential to scale supply to 10,000 tonnes per annum LCE
- Product sold as lithium-bearing crystallite, reducing capital and operational costs
- Pricing linked to battery grade lithium carbonate via a formula
Strategic Partnership for Early Market Entry
Prairie Lithium (ASX – PL9) has taken a significant stride towards commercialising its Prairie Lithium Project in Saskatchewan, Canada, by signing a 10-year offtake heads of agreement with South Korea’s Hydro Lithium. This deal commits Hydro Lithium to purchase 100% of the lithium-bearing crystallite produced at Prairie’s Phase 1 proof-of-concept plant, initially capped at 150 tonnes per annum lithium carbonate equivalent (LCE), with ambitions to scale up to 10,000 tonnes per annum.
Reducing Capital Intensity Through Intermediate Product Sales
By selling lithium as a crystallite intermediate rather than battery-grade chemicals, Prairie Lithium sidesteps the substantial capital expenditure and operational complexities associated with refining. This approach mirrors the spodumene concentrate model common in lithium mining, allowing Prairie to generate early revenue and establish supply chains while deferring more capital-intensive processing steps to Hydro Lithium’s South Korean refinery.
Innovative Refining Technology and Pricing Mechanism
Hydro Lithium employs proprietary CULX technology to convert the crystallite feedstock into battery-grade lithium carbonate and hydroxide, products critical for electric vehicle batteries and energy storage. The pricing formula for the crystallite is linked to battery-grade lithium carbonate prices, factoring in lithium content, conversion costs, and efficiency. This structure ensures both parties benefit from lithium price upside while maintaining attractive margins in the current market environment.
Regional and Industry Implications
The agreement not only strengthens Prairie Lithium’s commercial outlook but also highlights Saskatchewan’s growing role in the global lithium supply chain. Local government officials have expressed support, emphasizing the importance of developing sustainable resource markets and international trade partnerships. For Hydro Lithium, the partnership expands feedstock sources and leverages its refining capabilities to meet growing demand for battery-grade lithium chemicals.
Looking Ahead
While the heads of agreement are not yet definitive, the collaboration sets a clear path for Prairie Lithium’s initial production phase and potential scale-up. The success of this partnership will depend on the timely completion of Prairie’s proof-of-concept plant and the finalisation of definitive agreements. Together, the companies aim to create a streamlined, cost-effective supply chain from Canadian lithium resources to Asian battery markets.
Bottom Line?
This offtake deal positions Prairie Lithium to accelerate market entry with reduced capital risk, but scaling volumes remains a key watchpoint.
Questions in the middle?
- Will Prairie Lithium secure definitive agreements and meet production timelines for Phase 1?
- How effectively can Hydro Lithium’s CULX technology convert crystallite at scale?
- What impact will lithium price volatility have on the pricing formula and margins?
