Premier African Minerals is pursuing a lithium concentrate supply deal with commodities giant Glencore, as it seeks to clear debt from an inconclusive offtake agreement.

The London-listed Premier operates the Zulu lithium mine in Zimbabwe, where it has missed several production deadlines because of technical problems to bring online a spodumene concentrator.

As a result, it owes major shareholder Canmax Technologies $35 million plus interest under an offtake prepayment deal.

“Premier has entered into a non-binding letter of interest with Glencore International regarding the possible purchase of spodumene concentrate,” Premier said in a statement.

If the deal is concluded, Glencore would assist Premier to manage and repay the debt owed to Canmax and other creditors, Premier said.

Under the 2022 offtake deal, Canmax, the single largest shareholder in Premier with a 13% stake, would get 50,000 metric tons of spodumene concentrate from Zulu annually, starting before the end of May 2023.

Premier African Minerals CEO George Roach said: “Premier appreciates enormously the commitment and persistence from all to get us to this point. Our focus is now firmly set on the final completion and optimisation of the spodumene float section.”

Premier said it had agreed with Canmax to secure a binding spodumene purchase agreement with Glencore within the next three months.

The Zulu Project, located 80km from Bulawayo, is considered one of the largest undeveloped lithium-bearing pegmatites in the country. It spans 3.5km² across 14 mineral claims.