(Reuters) - Australian Vanadium Ltd (AVL) (AVL.AX) said on Wednesday it penned a non-binding agreement with a unit of steelmaker HBIS Group Chengsteel that could see the Chinese firm buy vanadium and invest in the Perth-based firm’s flagship project.
AVL signed a letter of intent with Hebei Yanshan Vanadium and Titanium Industry Technology Research Co Ltd that will allow both companies to negotiate a binding agreement for the sale of vanadium products.
AVL added that the Chinese company has already started due diligence on its flagship Australian Vanadium Project in Western Australia and the company.
Representatives of the Chinese company and AVL are expected to meet in Chengde, a city in Hebei province, this month to discuss an offtake agreement, it said.
Shares of AVL jumped as much as 14.3% in early trade to A$0.012.
Reporting by Maria Ponnezhath and Nikhil Kurian Nainan in Bengaluru; editing by Richard Pullin