Pilbara Minerals Secures $100 Million Prepayment in Canmax Offtake Agreement with Price Floor
Pilbara Minerals’ Pilgangoora Operation in Western Australia. Photo Credit: Pilbara Minerals
Key Points
- Pilbara Minerals executed two-year binding offtake agreement with Canmax for 150,000 tonnes per annum of spodumene concentrate, with optional 12-month extension.
- Agreement includes US$1,000 per tonne price floor on SC6 basis with no upside price limitation, providing downside protection and full upside leverage.
- US$100 million unsecured interest-free prepayment to be repaid through offset against spodumene concentrate deliveries under the agreement.
- Canmax, a Shenzhen-listed industrial group, recently signed similar 150,000 tonne per year offtake agreement with Liontown Resources in December 2025.
- Supply commences in calendar year 2026 subject to receipt of prepayment, with PLS maintaining flexibility to supply from either Pilgan or Ngungaju Plant.
Agreement Structure and Terms
PLS Group Limited announced it has executed a multi-year offtake agreement with Canmax Technologies Co. Ltd for the supply of spodumene concentrate from its Pilgangoora Operation1. The two-year binding agreement provides for 150,000 tonnes per annum of spodumene concentrate, with an option for PLS to supply additional volumes per annum.
PLS holds an option to extend the agreement for an additional 12 months beyond the initial two-year term to supply 150,000 tonnes. Supply is scheduled to commence in calendar year 2026 subject to receipt of the US$100 million prepayment, with the agreement providing for supply through mid-CY28.
| Agreement Terms | Details |
|---|---|
| Annual Volume | 150,000 tonnes spodumene concentrate |
| Contract Duration | 2 years (CY26-mid CY28) + 12-month extension option |
| Price Floor | US$1,000/t (SC6 basis) with no upside limitation |
| Prepayment | US$100M unsecured, interest-free |
| Pricing Methodology | Aligned to prevailing market price |
The pricing methodology is aligned to the prevailing market price of spodumene concentrate, while the floor price mechanism provides downside protection against market volatility while preserving full exposure to price upside.
Prepayment Enhances Near-Term Liquidity
The US$100 million unsecured prepayment, which will be received without interest cost or restrictive covenants, enhances near-term liquidity and demonstrates Canmax’s conviction in both the partnership and long-term lithium market fundamentals. The prepayment will be repaid through an offset against spodumene concentrate sold under the offtake agreement.
PLS has flexibility to supply offtake commitments from its Pilgangoora Operation, including either the Pilgan Plant or Ngungaju Plant or a combination of both. Based on planned production and existing sales commitments, PLS has uncontracted capacity available from the Pilgan Plant to supply up to 100% of its contracted offtake volumes inclusive of the Canmax tonnes.
PLS Managing Director and CEO Dale Henderson emphasized the agreement’s strategic value: “This agreement builds on our established relationship with Canmax and reflects both the quality and consistency of Pilgangoora’s spodumene and PLS’ proven capability as a reliable, large-scale operator. The US$100M interest-free prepayment and floor price structure demonstrate strong commercial confidence in our product and performance, while preserving full exposure to price upside.”
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Canmax Expands Australian Lithium Sourcing
Listed on the Shenzhen Stock Exchange, Canmax is a diversified industrial group and one of the world’s leading manufacturers of lithium-ion battery materials. The company operates joint venture operations with CATL, one of the world’s largest battery manufacturers.
The Pilbara Minerals agreement follows Canmax’s December 2025 execution of an offtake agreement with Liontown Resources for 150,000 wet metric tonnes per year of spodumene concentrate over two years in 2027 and 20282. The Liontown agreement utilizes a formula-based pricing mechanism referencing spodumene concentrate indices.
Pilbara’s Henderson added: “Deepening our partnership with Canmax further diversifies our customer base and reinforces PLS’ position as a leading, reliable supplier at scale to the lithium materials market.” “The agreement strengthens our near-term liquidity and preserves operational flexibility through optional volumes, supporting disciplined production and sales decisions as lithium market fundamentals continue to improve.”