Supply Chain Risks Loom as LU7 Bets on Nigerian Lithium for North American Refining

Strategic Supply Secured for North American Lithium Refining

Lithium Universe Limited (ASX – LU7) has taken a significant step forward in its quest to establish a robust North American lithium supply chain by signing a binding 10-year offtake agreement with Nigeria’s Norah Mining Limited. This deal guarantees up to 80,000 tonnes per annum of spodumene concentrate, a key lithium ore, to feed LU7’s planned Bécancour Lithium Refinery in Quebec, Canada.

The agreement not only secures a critical raw material supply but also aligns with LU7’s broader strategy to close the “lithium conversion gap” in North America, reducing reliance on foreign lithium converters. The Bécancour refinery is designed to produce approximately 18,270 tonnes per year of battery-grade lithium carbonate, a vital component for electric vehicle batteries and energy storage.

Nigeria’s Emerging Lithium Industry Gains Global Attention

Norah Mining’s spodumene project in Nigeria is currently under construction, with a concentrator expected to be operational in the second half of 2026. This facility will produce export-grade spodumene concentrate with a lithium oxide grade of 6.0%, meeting the quality requirements for LU7’s refinery feedstock. The partnership highlights Nigeria’s growing role in the global lithium market, transitioning from artisanal mining to regulated, technology-driven production.

LU7’s involvement extends beyond supply, as it will provide technical advisory services to Norah Mining, leveraging expertise from established lithium operations in Australia. This collaboration aims to accelerate Norah’s ramp-up and ensure consistent, high-quality concentrate production.

Pricing and Commercial Terms Reflect Market Realities

The pricing mechanism for the spodumene concentrate is linked to the Shanghai Metals Market benchmark, with LU7 benefiting from a strategic partner discount of 7.5%. This arrangement offers LU7 a competitive edge in securing feedstock at favourable terms amid a lithium price recovery that has seen battery-grade lithium carbonate prices more than double since the company’s 2025 feasibility study.

Additionally, LU7 retains the flexibility to trade the spodumene concentrate on the open market if its refinery is not ready to receive shipments, potentially capitalising on strong market demand and price momentum.

Strengthening North American Lithium Independence

This binding agreement is a cornerstone for LU7’s vision of building an integrated lithium supply chain across Canada and the United States. It complements the company’s plans for a second refinery in Brownsville, Texas, aimed at further closing the lithium conversion gap in North America. By securing long-term, high-quality feedstock and establishing strategic upstream partnerships, LU7 positions itself as a key player in the continent’s critical minerals landscape.

Executive Chairman Iggy Tan emphasised the milestone nature of the deal, highlighting its role in securing operational certainty and independence from foreign converters. Meanwhile, Norah Mining’s chairman underscored the agreement’s importance in advancing Nigeria’s ambitions within the global critical minerals value chain.