BCI Minerals Ltd and PT Mineral Industri Indonesia have signed a non-binding off-take agreement for future salt supply.

The last two to three years have seen a flurry of downstream companies such as automotive OEMs signing off-take deals for future supply of raw materials such as lithium, rare earths and graphite in the face of growing demand as the EV revolution continues. Now this same premise has spread into the salt industry with the announcements by BCI Minerals Ltd and PT Mineral Industri Indonesia (Persero) (MIND ID) of a non-binding off-take agreement for future supply, hot on the heels of another deal inked at the end of June with Japanese company, Itochu.

The MIND ID memorandum of understanding (MOU) represents a potential off-take of up to 1Mtpy of solar from the West Australian solar salt project, which began construction in February 2022. Supply is expected to commence in 2026, for an initial five years, with an option to extend for another five. Significantly, the MOU raises a potential equity stake in BCI by MIND ID of up to A$100M (US$66M). MIND ID is the holding company for the Indonesian government’s investments in the mining industry.

Itochu is a leading Japanese trading and investment house which has concluded a term sheet with BCI to purchase a minimum of 3.6Mt of industrial salt over 5 years, starting with 0.5Mt in 2026 and 2027, taking 0.6Mt in 2028 and 1Mt in 2029 and 2030. A formal off-take agreement will be finalised by the end of December 2023. Itochu will also be BCI’s preferred trading partner for Japan, Korea and Taiwan and specific users, subject to the formal agreement going ahead.

The MOU with MIND ID provides a framework for the agreement, details and approvals will have to be ironed out before it is formally ratified. However, both these off-take agreements provide shareholder confidence in the project and significant support from major players in the future of BCI’s Mardie project. Mardie is scheduled to produce 5Mtpy of salt and 140ktpy of potassium sulphate – which is projected to make it the largest salt operation in the world