Elevra Lithium (ASX:ELV; NASDAQ:ELVR) announced Monday that it has signed a non-binding Memorandum of Understanding (MoU) to supply Mangrove Lithium with spodumene concentrate produced at North American Lithium (NAL).
In November 2024, Sayona Mining’s deal to buy US-based Piedmont Lithium in a $623 million merger to create Elevra Lithium. The tie-up brought together the two owners of the NAL project in Quebec’s Abitibi region.
At the time, Sayona said the all-stock deal for US-based Piedmont will help to consolidate its Canadian operations and strengthen its exposure to the North American electric vehicle sector.
A binding definitive agreement between Elevra and Mangrove may be signed at a future date, subject to Mangrove making a final investment decision prior to June 2027 for construction of a lithium conversion facility and agreement on the final terms, the companies said.
Under the terms of the non-binding MoU, Elevra and Mangrove intend to negotiate a definitive agreement under which Elevra could supply up to 144,000 tonnes per year of spodumene concentrate to Mangrove at market related prices, subject to a floor and ceiling price, which would support positive cashflow generation for NAL at any point in the pricing cycle.
The proposed supply would be for an initial period of five years, commencing in 2028 and ramping up to 144,000 tonnes per annum by 2030, which would represent approximately 46% of the estimated sales volumes.
Mangrove said it intends to process the spodumene concentrate in Eastern Canada, potentially on-site at NAL, into battery-grade lithium hydroxide or carbonate to support the establishment of a resilient domestic battery supply chain in Canada.
Mangrove’s facility would have the capacity to produce 20,000 tonnes of battery-grade lithium a year, which is the equivalent to 500,000 EVs.
Mangrove said it has demonstrated the viability of their lithium conversion process in a pilot plant located in Delta, British Columbia.
Test work is being completed on NAL spodumene and results are expected in Q3 CY26.
Alongside the pilot plant, Mangrove said it has constructed and commissioned North America’s first commercial electrochemical lithium refining plant, with a 1,000 tonnes per annum capacity, which will be used for customer product qualification programs.
Mangrove recently announced an $85 million financing round led by Canada Growth Fund, with support from returning investors Breakthrough Energy, and BMW i Ventures. Other key supporters include Mitsubishi Corporation, Orion Industrial Ventures, Export Development Canada, InBC, Asahi Kasei, and BDC Capital.
“Signing this non-binding Memorandum of Understanding with Mangrove marks an important step in strengthening our commercial position while supporting the Canadian Government’s priority to build a secure critical minerals supply chain,” Elevra CEO Lucas Dow said in a news release.
“By supplying North American Lithium’s production to a local partner, we expect to improve our cost efficiency and reinforce the competitiveness of our operations.”
“Partnering with Elevra to source Canadian spodumene concentrate is a natural strategic fit for Mangrove,” Mangrove chief commercial and strategy officer Annie Liu added. “Today, most lithium refining happens overseas, resulting in the loss of downstream value from Canada’s raw resources. By locating conversion close to the feedstock, we enhance supply chain security, support the creation of high-value domestic jobs, and advance Canada’s Critical Minerals Strategy.”
