BEIJING (Asian Metal) 20 May 20 – Australian-based Technology Metals Australia Limited today announced the execution of a non-binding Memorandum of Understanding (“MoU”) with Big Pawer Electrical Technology Xiangyang Inc. Co., Ltd. (“Big Pawer”). The MoU covers establishing a binding V2O5 offtake agreement over vanadium production from the Gabanintha Vanadium Project and a joint venture (“JV”) to investigate the opportunity to produce vanadium electrolyte and establish a Vanadium Redox Flow Battery (“VRFB”) manufacturing base in Australia.
The MoU establishes a framework for ongoing discussions and negotiations aimed at delivering a definitive and binding offtake agreement and the establishment of a JV for vanadium electrolyte/VRFB manufacturing in Australia. Key terms that have been defined and agreed upon in the MoU are:
(1) Minimum annual quantity of V2O5 to be purchased of 1,000 Tpa on a take-or-pay basis;
(2) Maximum annual quantity of V2O5 to be purchased of 5,000 Tpa subject to product availability;
(3) Big Pawer to purchase such quantity of product that is available, up to 1,000 Tpa, during the ramp-up and commissioning phase of the Project;
(4) Sales to be based on CIP at Big Pawer’s selected port of choice in China;
(5) Minimum term of five years with an option to renew for an additional five years;
(6) Big Pawer to provide its proprietary VRFB technology exclusively in Australia to the JV, subject to agreement of a suitable Sales and Marketing Plan.
The next steps to progress towards finalizing the Agreement include due diligence to be completed by both parties in conjunction with further refinement and agreement of the key off take terms. The parties intend to complete site visits as part of the due diligence process. The MoU is effective until 30 December 2020 unless the parties mutually agree to formally terminate or extend the term.
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