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Canada Lithium agrees to supply Chinese trader

TORONTO (miningweekly.com) – Toronto-listed Canada Lithium has entered into a five-year agreement to supply China-based commodity trader Tewoo-ERDC (Tianjin Products and Energy Resources Development), with a minimum of 12 000 t of battery-grade lithium carbonate a year.

The five-year agreement also included a provision for the formation of a Sino-Canadian marketing joint venture to be incorporated as Tewoo Québec Lithium, subject to government approvals in China.

Under the terms of the agreement, Canada Lithium has to deliver lithium carbonate free-on-board to the Port of Vancouver or Port of Prince Rupert, British Columbia, beginning March 2013.

Canada Lithium said delivery of the first 12 000 t was scheduled to take place over the course of calendar year 2013. Following 2013 and for the four years thereafter, Tewoo has committed to import a minimum 12 000 t/y with a provision to increase the offtake volumes by as much as 20% a year over the previous year’s deliveries.

In the event Tewoo triggers the 20% clause in 2014, Canada Lithium could deliver up to a maximum 14 400 t during 2014. Prices would be adjusted quarterly based on actual market prices.

Canada Lithium’s mine and processing plant near Val d’Or, Québec, is nearing the end of construction and is scheduled to enter the commissioning phase late this year. It would have a yearly capacity to produce about 20 000 t of lithium carbonate.
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