Prairie Lithium Signs Binding Agreement with Hydro Lithium to Purchase Phase 1 Output and Supply Refining Equipment for Canadian Lithium Project
Prairie Lithium, listed on the Australian Securities Exchange, has signed a binding definitive agreement with Hydro Lithium for the purchase of 100% of Phase 1 production from its lithium project in Saskatchewan, Canada.
Phase 1 will produce approximately 150 tonnes per year of lithium carbonate equivalent (LCE) and represents the company’s initial commercial-scale proof-of-concept operation.
Under the agreement, Hydro Lithium will purchase the entire Phase 1 output and provide roughly A$10 million worth of proprietary refining equipment, which it will operate as part of the project’s processing flowsheet.
Prairie Lithium described the agreement as a key milestone in reducing project risk, securing a committed offtake partner while adding technical expertise and processing capability to the development.
For shareholders, the company said the deal offers external validation of its development strategy and establishes a clearer pathway toward first commercial sales.
Established Processing Route and Expansion Plans
The product pricing mechanism will be linked to battery-grade lithium carbonate market prices and determined by lithium content, conversion costs, and processing efficiency.
Hydro Lithium operates an existing battery-grade lithium refinery in South Korea with a nameplate capacity of 3,600 tonnes per year of LCE, providing Prairie with an established downstream processing route for its production.
This arrangement aligns with Prairie Lithium’s strategy to produce an upgraded intermediate lithium product while relying on specialized partners for final battery-grade conversion.
Construction of the Phase 1 facility in Saskatchewan is progressing steadily. Production and disposal wells have already been drilled, power infrastructure has been installed, and the building designed to house the direct lithium extraction equipment is nearing completion.
Following the start of production, the two companies intend to expand supply volumes under the agreement as Prairie scales operations.
The contract has an initial term of 10 years, with options for renewal in additional 10-year increments, potentially extending the total duration to 30 years, subject to mutual agreement.
Strategic Partnership in the Global Energy Transition
Managing Director Paul Lloyd described the agreement as a major step forward for the company, enabling Prairie Lithium to integrate its operations across the value chain from resource extraction to battery-grade production.
He noted that the partnership also reflects growing cooperation between the governments of Canada and South Korea in building resilient critical minerals supply chains.
According to Lloyd, combining Saskatchewan’s lithium resources with South Korea’s advanced processing technology demonstrates the type of international collaboration required to support the global energy transition.
Chief Executive Officer Dr Uong Chon of Hydro Lithium said the company views Prairie Lithium’s project as one of the most advanced lithium brine developments in North America.
He added that Saskatchewan hosts high-quality lithium brine resources and confirmed that Hydro Lithium will commit approximately $10 million in refining equipment and technical expertise as part of the strategic collaboration.
Overall, the agreement positions Prairie Lithium to become one of the early lithium brine producers bringing new supply to the North American battery materials market, while strengthening cross-border partnerships in the rapidly expanding critical minerals sector.
About the Author
