EnergyX books a $2 billion, 10-year lithium sale to Trafigura before its plants reach commercial scale

EnergyX, a privately held lithium developer, has signed up commodity trader Trafigura to buy 100,000 metric tons of battery-grade lithium over 10 years, a take-or-pay contract it values at more than $2 billion at today's prices, signed before either plant that will supply it has reached commercial production.

What Trafigura agreed to buy

EnergyX said Monday it has signed a binding, definitive offtake agreement under which Trafigura, one of the world's largest independent commodity traders, will buy 100,000 metric tons of battery-grade lithium products over a 10-year term. EnergyX described the contract as take-or-pay, a structure that generally obliges the buyer to pay for contracted volumes whether or not it takes delivery.

Trafigura's own announcement from Geneva lines up with the main terms. It will buy lithium carbonate from EnergyX's Project Black Giant in Antofagasta, Chile, and lithium hydroxide from Project Lonestar in Texas. Both companies say Trafigura will take 66% of Black Giant's first-phase output and 30% of Lonestar's first phase. It is EnergyX's first publicly announced offtake deal.

How the $2 billion figure is built

The headline value is a price assumption, not a disclosed contract price. EnergyX said the agreement represents more than $2.0 billion in revenue over its term based on current market prices of about $20,000 a metric ton, and its release says those revenue figures are illustrative and will vary with lithium prices and delivered volumes. Deliveries are also subject to customary conditions, including product qualification and the commissioning of the plants.

Spread evenly, 100,000 tons over 10 years averages about 10,000 tons a year, a TickerGrove calculation. Reuters, which first reported the deal, described the split as roughly 5,000 tons a year each of hydroxide and carbonate. That is consistent with the Chilean side: Eni, which invested in Black Giant in July, has said the project's first phase is designed for 7,500 tons a year, so a 66% share works out to roughly 4,950 tons, also a TickerGrove calculation.

The plants still have to be built

Neither project is producing at commercial scale yet. Trafigura said EnergyX is targeting commercial production at Black Giant in 2028 and at Lonestar in 2029. EnergyX says its demonstration plants in Chile and Texas have proved out its direct lithium extraction technology, and that it commissioned the Lonestar plant in April.

Black Giant is planned in two phases. Eni has said the first train, at 7,500 tons a year, is expected to start in 2028, and a second phase adding 45,000 tons a year is targeted for 2030, for 52,500 tons a year at full capacity.

Financing is the next hurdle, and the contract is partly about clearing it. Both companies said offtake is a key requirement for EnergyX's financing from the U.S. Export-Import Bank and other project lenders. EnergyX has previously disclosed a $690 million letter of interest from EXIM, and in July Eni agreed to a phased $225 million investment for a 25% stake in the Black Giant subsidiary, along with an option to buy up to 25% of the project's total output. EnergyX said it is in talks with other buyers to bring contracted offtake to 80% as it heads toward 2028 production.

"A long-term purchase commitment from a counterparty of Trafigura's scale and credit quality shows that the market wants EnergyX's product," founder and Chief Executive Teague Egan said. "It also gives lenders and investors the revenue visibility they need before committing capital to commercial construction."

Where the first tons are likely to go

Both companies say a significant share of the volumes is expected to supply the U.S. battery supply chain. In the near term, though, Trafigura plans to sell the lithium first to customers in China and build toward U.S. buyers once the domestic battery supply chain is developed, according to the Reuters report. With the Texas hydroxide not due until 2029, readers should not treat the deal as an immediate addition to U.S. battery supply.

A bet on a newer way to make lithium

Direct lithium extraction, which pulls lithium from brine with filtration-style processes instead of large evaporation ponds, has drawn Exxon Mobil, Vulcan Energy Resources and Lilac Solutions, among others, but few developers have binding long-term sales on the books. Trafigura already has a lithium offtake with Standard Lithium, which is developing an Arkansas project using the same approach, so Monday's agreement deepens the trader's bet on the technology.

For EnergyX, which is privately held and backed by General Motors and Eni, the contract is a step toward the financing it needs to build. Egan said the company has to start producing commercial lithium before it can consider a public listing. For Eni shareholders, the deal adds an anchor buyer to a project in which Eni holds a 25% stake.