The PLS Group Ltd (ASX: PLS) share price is in focus after the ASX lithium share revealed a lithium agreement.
PLS Group is one of the world’s largest lithium miners, with its Pilgangoora operations in Australia. Canmax is listed on the Shenzhen Stock Exchange, it’s one of the world’s leading manufacturers of lithium battery materials and has joint venture operations with CATL.
Lithium agreement
PLS Group has announced that it has executed a multi-year offtake agreement with Canmax Technologies to supply spodumene concentrate (lithium).
This is a two-year binding agreement to supply 150kt per year of spodumene concentrate, with an option for PLS Group to supply additional volumes per year.
The agreement also includes an option for the ASX lithium share to extend the agreement for an additional 12 months beyond the initial two-year term, to supply another 150kt.
Excitingly, the agreement has a floor price of US$1,000 per tonne, without any upside price limitation. This means it provides “downside protection with full upside leverage”.
There is also a US$100 million unsecured interest-free prepayment which will be repaid through an offset against spodumene concentrate and sold under the offtake agreement.
Supply will commence in 2026, subject to receipt of the US$100 million prepayment.
How the ASX lithium share plans to supply this
The business said that it has the flexibility to supply offtake commitments from its Pilgangoora operation (including either the Pilgan plant or Ngungaju plant or a combination of both).
PLS Group said it has uncontracted capacity available from the Pilgan plant to supply up to 100% of the Canmax contract.
Management comments
The PLS Group Managing Director and CEO Dale Henderson said:
This agreement builds on our established relationship with Canmax and reflects both the quality and consistency of Pilgangoora’s spodumene and PLS’ proven capability as a reliable, large-scale operator.
The US$100M interest-free prepayment and floor price structure demonstrate strong commercial confidence in our product and performance, while preserving full exposure to price upside.
The agreement strengthens our near-term liquidity and preserves operational flexibility through optional volumes, supporting disciplined production and sales decisions as lithium market fundamentals continue to improve.
Deepening our partnership with Canmax further diversifies our customer base and reinforces PLS’ position as a leading, reliable supplier at scale to the lithium materials market.
Final thoughts on the PLS Group share price
Considering where it was in June 2025, this is a great update for the ASX lithium share as it means getting a good price for its lithium seems certain and it can benefit if the price goes higher.
I’m not sure whether the business is a buy or not because it has already risen more than 80% in the past year. Will the lithium price keep climbing? I don’t want to make any predictions, so I’m happy to leave this possible opportunity and look at other ASX growth shares.
