Western Areas Awards new Forrestania Offtake Contracts

THE BOURSE WHISPERER: Western Areas (ASX: WSA) has inked new offtake contracts with BHP Billiton Nickel West Pty Ltd and Jinchuan Co. Ltd for the company’s high-grade Forrestania Nickel Operation concentrate product.

Western Areas said the new contracts follow completion of a highly competitive tender process that has resulted in improved commercial terms compared to current offtake agreements.

“The company is very pleased with the execution of the new agreements that extend our long and mutually beneficial relationship with Nickel West and reintroduces Jinchuan as an offtake customer following completion of the Tsingshan contract as at 31 January 2020,” Western Areas managing director Dan Lougher said in the company’s announcement to the Australian Securities Exchange.

“It is notable that both of our offtake customers are involved in the downstream operation of nickel smelters.

“Western Areas firmly believes that the smelting of concentrates is a key process to continue to feed both the emerging Electric Vehicle (EV) battery market, via nickel sulphate, and the traditional stainless steel market.”

The Nickel West contract is a new agreement, rather than an extension of the previous arrangement that completes on 31 January 2020.

The key terms of the new contract include a contract period of three years from 1 February 2020 or until completion of the aggregate quantity of 10,000 tonnes of nickel contained in concentrate per annum with a 30,000 tonne, aggregate limit.

Key terms for the Jinchuan contract include a contract period of two years from 1 February 2020 or until completion of the aggregate quantity of 10,000 tonnes of nickel contained in concentrate per annum with a 20,000 tonne, aggregate limit.

The contract can be extended, by mutual agreement, for a further twelve-month period at an aggregate nickel quantity to be agreed between Western Areas and Jinchuan.

Jinchuan is the largest nickel matte and cathode producer in China and Western Areas believes that aligning itself with a China-based producer of Jinchuan’s calibre is strategically important as the market for higher value products continues to evolve.

 

Web: www.westernareas.com.au