The miner has signed a binding offtake deal with a subsidiary of its second largest shareholder, Ningbo Shanshan, to supply up to 120,000 tonnes per annum over five years from January 2021.
Altura will supply to Hunan Yongshan Lithium an initial 44,000t of 6% spodumene concentrate this year for commissioning and ramp-up of a new lithium chemical plant in China, plus a maximum 30,000tpa in 2021.
The take-or-pay contract, based on a pricing formula, will then expand to a minimum 60,000tpa from January 2022, with an option to increase supply to 120,000tpa.
Shanshan owns 15.1% of Altura and started construction of a 25,000tpa lithium carbonate equivalent plant in April. It has plans to expand to 45,000tpa over time.
Altura managing director James Brown said his company was realising its dream of becoming a key supplier to Shanshan, while diversifying its customer base and de-risking its sales channels.
"This latest offtake agreement is the result of months of close discussions with Shanshan to ensure they get exactly what they need to support their new lithium chemical plant," he said.
"Our customer list boasts some of the biggest and best names in the battery materials sector and adding Shanshan to that list further demonstrates the market's increasing desire for stable, long-term, high-quality lithium concentrate supplies."
He said Shanshan had been impressed by Altura's performance in the recent declining market.
Altura claims to be the second lowest cost lithium miner in Australia, beaten only by the giant Greenbushes operation in southern WA. Altura reported cash costs of US$354/t last quarter, and it is targeting costs below $300/t.
Production for the March quarter was almost 45,000tpa, and the June quarter was expected to be similar.
Unlike many of its peers, it has all its cargoes scheduled for the year.
Altura shares leapt around 22% in early trade to A6.8c.
The company's stock bottomed out at 2.7c in March, prior to a successful recapitalisation, but it remains well below its 12-month peak of 14c last June.
Yongshan is considered a related party, so shareholders will need to approve the offtake deal at a planned meeting.
