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The most popular announcement thread on HotCopper today is that from lithium producer Elevra (ASX:ELV), which has today inked a spodumene supply agreement with South Korea’s LG Energy Solution.
However, more than one investor was concerned with the company failing to include a floor price in its disclosure on Thursday. Elevra is to supply 240Kdmt of spodumene concentrate over three years, with 30,000dmt set for this calendar year.
“The Agreement establishes a market-linked pricing for spodumene concentrate adjusted for lithium content,” Elevra wrote on Thursday.
For some, that has been enough to rankle. The money Elevra will make is thereby dependent on the movements of a commodity price it can’t control, and that fact may be why the company’s share price was down -2.7% at 2.00pm AEDT.
To be fair, though, the entire materials sector is getting slammed on Thursday; lithium prices have also been having a volatile day; the GFEX Main Continuous carbonate price is up 2.3% on Thursday.
“This agreement with LG Energy Solution represents an important step in implementing the commercial strategy we outlined,” ELV CEO Lucas Dow said.
“It provides Elevra with a committed customer for a meaningful portion of [our] production while retaining exposure to spodumene concentrate market pricing.”
Whether investors are being fair to the company only time can tell; worth noting is that ELV is also listed on the NASDAQ and shares fell overnight on Wall Street where they’re worth more than US$34/sh.
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