Australia-headquartered Prairie Lithium has secured a binding offtake heads of agreement with Korean group Hydro Lithium, paving the way for the company to sell all output from its Phase 1 commercial-scale proof-of-concept plant into the Asian battery materials market.

Under the agreement, Hydro Lithium will purchase 100% of the lithium-bearing crystallite produced at the Saskatchewan-based project – up to 150 t/y lithium carbonate equivalent (LCE) for ten years – and will use best endeavours to support a future scale-up to as much as 10 000 t/y LCE. The crystallite product will be shipped to Hydro Lithium’s refinery in South Korea, where it will be converted into battery-grade lithium carbonate and lithium hydroxide.

Prairie Lithium MD Paul Lloyd said the agreement demonstrated how the company intended to commercialise initial production and generate early revenue. “This is very similar to a spodumene concentrate transaction – a derisked supply chain that allows resource companies to simplify operations and reduce capex by focusing on producing an intermediate product that can be brought to market quickly,” he commented.

Pricing for the crystallite product will be linked to battery-grade lithium carbonate and calculated using a formula incorporating lithium content, conversion cost and conversion efficiency. The structure ensures both Prairie and Hydro Lithium maintain margins at current price levels while retaining exposure to any future market upside.

The deal follows Prairie Lithium’s recently announced North American offtake, forming part of a broader strategy to secure diversified sales channels as it advances development of its namesake project.

Hydro Lithium CEO Dr Uong Chon said the partnership aligned Canadian resource supply with South Korea’s refining capacity. “Our revolutionary lithium refining technology allows resource companies to keep capex and opex low while still maintaining exposure to the upside potential of battery grade lithium prices,” he said.

Saskatchewan Minister of Trade and Export Warren Kaeding welcomed the agreement, saying new supply chains would help unlock the province’s emerging lithium industry. “We look forward to supplying the world with Made-In-Saskatchewan lithium that will power the future,” he said.

Prairie Lithium’s Phase 1 plant, currently under construction, is expected to produce about 150 t/y LCE in the form of crystallite. The project benefits from strong existing infrastructure and is being advanced under a strategy focused on minimising environmental impact through reduced water use, land disturbance and waste generation.