Elevra Lithium (ASX:ELV) executed a binding spodumene concentrate supply agreement with Mangrove Lithium for the long-term supply of spodumene concentrate produced at its North American Lithium (NAL) operation in Québec, with an initial term of seven years and a further seven-year renewal option, according to a Friday Australian bourse filing.

The company said contracted annual volumes total 122,000 dry metric tonnes (dmt) in year one and 144,000 dmt of spodumene concentrate at 6% equivalent from year two on a take-or-pay basis, with Mangrove able to elect to increase volumes in any year by up to 20% subject to available capacity.

The agreement includes a floor price expected to be above NAL's cost of production, providing downside price protection over the life of the agreement, with Mangrove required to achieve a final investment decision by Dec. 31, 2028 and commercial operation no more than three years thereafter, the filing added.

The agreement follows a non-binding memorandum of understanding announced on Feb. 10, with the supply destined for Mangrove's proposed 20,000 tonne per year lithium carbonate equivalent conversion facility in Eastern Canada, it added.