EnergyX signs two billion dollar lithium deal with Trafigura

Energy Exploration Technologies has entered into a binding ten year offtake agreement with the global commodities trader Trafigura. The contract secures the purchase of 100,000 metric tons of battery grade lithium products over the duration of the term. Based on current market valuations of approximately 20,000 per metric ton, the company estimates the arrangement will generate more than two billion dollars in revenue. This significant commercial milestone provides a stable revenue stream for the developer as it advances its flagship projects in Chile and the United States.

The agreement encompasses lithium products from two distinct sources. Lithium carbonate will be supplied from the Black Giant project located in Chile, while lithium hydroxide will originate from the Lonestar facility in Hooks, Texas. The Lonestar site is a demonstration plant commissioned in March that is capable of producing 250 metric tons per year of lithium carbonate equivalent. It operates within the Smackover formation, a lithium rich brine resource extending from Florida to Texas. The facility is notable as the first direct lithium extraction plant in the state to process locally sourced brine. Its primary objective is to demonstrate improvements in extraction efficiency, recovery rates and cost competitiveness, factors that have historically hindered the viability of lithium refining outside of China.

Currently, China controls an estimated 70 to 75 per cent of global lithium chemical conversion capacity, creating a significant bottleneck in the battery supply chain. This concentration has left the United States reliant on foreign processing capabilities. To address this, EnergyX secured a 225 million dollar investment from Italian energy company Eni SpA in July for a minority stake in the Black Giant project. The Chilean site has planned capacity to produce up to 52,500 metric tons of lithium carbonate per year across its first two phases. Additionally, the company received a 690 million dollar letter of intent from the US EXIM Bank to provide debt financing for the development of the project.

Teague Egan, chief executive officer of EnergyX, stated that a significant share of the offtake will be directed to the US battery supply chain. He noted that while Lonestar has been operating longer, more engineering has been conducted towards a commercial plant at Black Giant, which has been funded by the Eni investment. Target commercial phase one production for Black Giant is set for 2028, with Lonestar following in 2029. Egan emphasised that long term purchase commitments from counterparties of Trafigura’s scale provide the revenue visibility necessary for lenders and investors to commit capital to commercial construction. The production process will utilise the company’s proprietary GET Lit direct lithium refining technology platform, which is protected by more than 150 patents. Daniel von Arx, head of battery metals at Trafigura, expressed the company’s pleasure in supporting EnergyX’s development efforts. He highlighted that the agreement reflects the trader’s ability to help bring strategic critical minerals projects online, thereby supporting secure and diversified supply chains for the US automotive and energy storage industries.