Jason Brewer, CEO of Marula Mining, delves into the process of finalising a long-term offtake agreement for Marula Mining spodumene ore.
Here are the key points from the interview.
- Finalizing Offtake Agreement: Marula Mining is finalizing a long-term offtake agreement for spodumene ore from the Blesberg Mine. They initially worked with Traxxis but terminated this for a more long-term arrangement.
- European Partnerships: The company is focusing on European-based groups for the offtake agreement, citing cultural fit and regulatory transparency in Europe as key reasons.
- Selection Criteria for Partners: The criteria for selecting a partner included international market access, logistical capabilities, and strong personal relationships. They narrowed down to two groups, eventually choosing one based in Switzerland.
- Market Challenges: The process was complicated by a significant drop in spodumene prices in the last quarter of 2023, creating challenges in finalizing the deal.
- Long-Term Agreement: The agreement is for an initial three years with an option to extend for another three years, covering 100% of production.
- Operational and Tax Considerations: The agreement involved considerations like VAT, royalty, and export purposes, leading to a shift in the counterparty to a South African subsidiary for tax efficiency.
- KYC and Banking Details: Finalizing the agreement also involved resolving Know Your Customer (KYC) compliance and banking details.
- Future Plans and Confidence: The agreement is seen as a long-term transaction that underpins Marula’s operations and provides confidence to investors and shareholders.
- Focus on Single Party Offtake: Despite receiving over a hundred inquiries about their product, Marula chose to align with one group for operational simplicity.
- Progress and Future Developments: Marula Mining has made significant progress in a short time with the Blesberg project and is focusing on other key contractual agreements. They are also working on expanding their operations in Kenya and South Africa.
- Upcoming Developments: The company is expecting the arrival of the Tomra unit to increase capacity at Blesberg, and they are awaiting exciting results from their graphite exploration in Kenya.
- Ongoing Projects and Listings: Marula is actively working on various projects and plans to complete listings in Nairobi, South Africa, and London within the next four to six weeks.
This interview provides insights into Marula Mining’s strategic decisions, challenges, and future plans in the lithium mining sector.
