ioneer Ltd (ASX:INR) has secured two distribution and sales agreements for the supply of boric acid from its Rhyolite Ridge Lithium-Boron Project in Nevada, USA, substantially completing its Asian boric acid distribution and sales network.
The three-year boric acid distribution and sales agreements were signed with Kintamani Resources Pte Limited for the territories of Malaysia, Indonesia, Singapore, Thailand, Vietnam and the Philippines and with Boron Bazar Limited for the territories of Bangladesh, India, Pakistan and Myanmar.
The signing of these agreements completes the key components of ioneers current Asian boric acid marketing plan to secure direct offtake or distribution and sales agreements with recognised industry participants for most major Asian countries.
ioneers managing director Bernard Rowe said: “Signing these distribution and sales agreements is a significant milestone for ioneer as we look ahead to Rhyolite Ridge becoming operational.
“These agreements demonstrate the high demand for sustainably produced boric acid and further underpin the projects compelling economics.
“Boric acid sales are key in delivering an all-in sustaining cash cost for lithium from the Rhyolite Ridge project at the bottom of the global lithium cost curve.
“We are delighted that at this early stage, the first three years of production from Rhyolite Ridge are placed.
“These agreements continue to demonstrate our ability to sell boric acid and affirms the quality of our premium quality boric acid by respected boron industry partners.”
The recently released definitive feasibility study (DFS) shows that the first year of the operations production is secured by a binding offtake agreement while in year two 85% of production is secured and in year three 88% is secured.
The company anticipates years four and five of operations will fall to 70% secured as the three-year renewal options are not guaranteed, however, the shortfall in offtake in year two and beyond is expected to be met by North American offtake and sales in other Asian territories.
The territories covered by ioneers boric acid distributors in Asia
Under the agreements, the parties have committed to minimum sales volume targets per annum of boric acid by territory.
The supply of boric acid to the distributors will be based on prevailing market prices for similar volumes and quality, and remain fixed for specified periods before being reset for the next period on a revolving basis through the term of the agreement.
The agreements each have a three-year term, with initial supply expected in quarter two 2023 as Rhyolite Ridge commences production and are conditional on ioneer making a positive final investment decision, which is expected in early 2021.
Key information required to make an FID includes advanced engineering, the award of all state and federal environmental and development permits, and an acceptable and executable funding plan for the project.
Asian marketing plan
These agreements are in addition to ioneers announcement on December 18, 2019, of its foundational binding offtake agreement with Dalian Jinma Boron Technology Group Co Ltd for 105,000 tonnes per annum of boric acid which included a distributiRead More – Source