Elevra Lithium share price on watch amid new long-term Mangrove supply deal

The Elevra Lithium Ltd (ASX: ELV) share price is in focus today after the lithium miner announced a binding supply agreement with Mangrove Lithium for long-term spodumene concentrate supply, featuring a price floor above production costs and no ceiling on potential pricing upside.

What did Elevra Lithium report?

• Signed a 7-year binding Spodumene Concentrate Supply Agreement with Mangrove Lithium, with a further 7-year renewal option
• Year 1 contracted volume: 122,000 dry metric tonnes (dmt); Year 2 onwards: 144,000 dmt per annum, take or pay
• Agreement includes a price floor above North American Lithium (NAL) production costs, and no price ceiling
• Performance subject to Mangrove Lithium achieving final investment decision (FID) by 31 December 2028
• Both Elevra and Mangrove have received investment support from the Canada Growth Fund

What else do investors need to know?

The agreement secures Elevra a stable, long-term local customer for its Québec-based NAL production, reducing exposure to volatile seaborne shipping costs and providing more predictable margins. This collaboration also strengthens Elevra’s presence in the North American lithium market, aligning with Canadian government initiatives to build a domestic battery supply chain.

Deliveries to Mangrove’s planned Eastern Canada conversion facility support a regional mine-to-chemicals supply chain. The agreement allows for flexible contracted volumes and further optional purchases before commercial operation, providing additional upside if Mangrove scales faster.

What did Elevra Lithium management say?

Elevra’s Chief Executive Officer and Managing Director, Lucas Dow, said:

This binding agreement with Mangrove Lithium is a significant step forward from the MoU we announced. It provides Elevra with a long-term local customer for NAL production on attractive terms, backed by a price floor set above our expected cost of production and with no price ceiling to limit potential upside. Supplying a customer located close to NAL also allows us to avoid the seaborne freight costs associated with shipping to international customers, which further supports our margins.

We are pleased that both Elevra and Mangrove Lithium have separately attracted the support of the Canada Growth Fund. That shared backing is a strong signal of the Canadian government’s commitment to building a domestic lithium supply chain.

What’s next for Elevra Lithium?

Looking ahead, Elevra Lithium will work with Mangrove as it seeks financing and final approval for the Canadian conversion facility. If all conditions are met, Elevra will benefit from consistent local demand and protection against downside price risk while remaining exposed to upside in global spodumene prices.

This agreement fits Elevra’s strategy of growing its North American presence and supporting the development of regional battery manufacturing infrastructure. Investors can watch for progress updates as Mangrove advances toward final investment decision and commercial operations.

Elevra Lithium share price snapshot

The Elevra Lithium share price has smashed the S&P/ASX 200 index (ASX: ELV) over the past 12 months with a whopping gain of approximately 130%.

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The post Elevra Lithium share price on watch amid new long-term Mangrove supply deal appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.