BEIJING (Reuters) - China's Tianqi Lithium Corp (SZ:002466), one of the world's biggest lithium producers, said on Tuesday that its Australian unit had signed a long-term supply agreement with Swedish battery maker Northvolt.
Tianqi Lithium Kwinana, which recently launched a processing plant in Western Australia, will supply lithium hydroxide, a chemical used in electric vehicle (EV) batteries, to Northvolt Ett from 2020-25, Tianqi said in a filing to the Shenzhen Stock Exchange.
Northvolt Ett is the name of Northvolt's planned lithium-ion battery plant in northern Sweden. What will be Europe's largest such plant is due to begin production in 2021 and counts German automakers Volkswagen (DE:VOWG) and BMW (DE:BMWG) among its investors.
The filing gave no absolute tonnage figure for the deal but said that the volume supplied each year would be no lower than 6-10% of Tianqi Kwinana's annual capacity.
The deal marks the second major customer win for Tianqi in a little more than a month. The company announced on Aug. 22 that it had signed up South Korea's LG Chem (KS:051910) on a three-year deal covering 2020-22 for no less than 15% of Kwinana's annual capacity.
Tianqi Lithium Kwinana started production of lithium hydroxide this month, with its first phase output to ramp up to the full 24,000 tonnes a year over the next 12-18 months.
Capacity will double to 48,000 tonnes with a second stage, though Tianqi has put that on hold until the ramp-up of the first phase is complete because lithium prices remain depressed.
Amid a wave of new supply and adjustments to EV subsidies in China, lithium hydroxide prices , as assessed by industry information provider Asian Metal, have fallen by 36.8% this year to 67,000 yuan ($9,428.25) a tonne.
