Off-Take Agreements for Critical Minerals: How We Actually Structure Them

Last month I sat across from a procurement lead from a European battery-adjacent group. He asked me one question that I keep hearing: "If we sign a five-year off-take with you, what does that actually look like on paper?"

Fair question. And the honest answer is that most people asking about off-take agreements have read the McKinsey summaries but never actually seen one signed. So let me walk through how we structure them at GBX, what a buyer in Rotterdam or Shanghai or Jebel Ali should expect, and where the friction points really sit.

What an off-take actually is (and isn't)

An off-take is a forward commitment to buy a defined tonnage of concentrate or ore at an agreed pricing formula, over a set term. That's it. It's not a purchase order. It's not a joint venture. And it's not — this is where I got tripped up in my first negotiation back in 2021 — a guarantee that the buyer will actually take physical delivery every month regardless of market conditions. There's almost always a tolerance band, a force majeure clause, and quality specs that can trigger rejection or price adjustment.

The useful thing about an off-take, from our side as a concession holder, is that it de-risks project finance. Banks and DFIs look at a signed off-take with a credit-worthy counterparty and they see cash flow they can lend against. From the buyer's side, you're locking in supply from a jurisdiction where you've done your due diligence, at a formula-based price that shields you from spot volatility.

Here's the thing though — the paper is easy. The operational reality is where these deals live or die.

How we structure ours at GBX

We hold 16 concessions across Gilgit-Baltistan. The commodity mix is deliberately weighted toward the critical minerals list: antimony, copper, molybdenum, tungsten, plus gold (lode and placer), silver, lead, bauxite, and industrial-grade nephrite. So when we sit down with a buyer, the first conversation is always about which commodity, which concession, and what stage that particular block is at.

A typical off-take we'll offer looks something like this:

Term: 3 to 7 years. Below three isn't worth the legal spend on either side. Above seven and the pricing formula gets uncomfortable for both parties given how critical minerals pricing has moved since 2022.

Volume: Committed base tonnage with an upside option. For antimony concentrate from our Ghizer-district blocks, we're typically talking 400–1,200 tonnes per year of ~55–60% Sb content, with a step-up clause once we complete the second-phase development.

Pricing: Formula-based. Usually London or Rotterdam reference price, minus a TC/RC or a flat treatment deduction, with quality adjustments for impurities (arsenic is the one everyone cares about in antimony — we run low, which helps). For copper concentrate we index to LME with standard Metal Bulletin TC/RC benchmarks.

Prepayment: This is where serious buyers separate from tire-kickers. A prepayment against future deliveries — anywhere from 15% to 40% of first-year contract value — gets us to production faster and gets the buyer a preferential price. We've had two prepayment structures proposed by Gulf trading houses this year alone.

Delivery: FOB Karachi or CIF destination port. Road haulage from GB down the Karakoram Highway to Karachi is roughly 1,650 km. It's not trivial — winter closures at Babusar and occasional Attabad-area disruptions are real — but we've moved material and we know the route.

Quality and sampling: Independent inspection at load port. SGS or Alfred H Knight, buyer's choice. Reference samples retained for 90 days.

Where buyers get it wrong

Look, I'll be blunt about something. The buyers who struggle most with Pakistan off-take are the ones who treat it like a Chilean or Australian deal with a discount. It's not. GB has its own mineral title regime under the Gilgit-Baltistan Mines and Minerals Act, royalty flows are provincial, and export documentation goes through federal channels. None of this is a problem — but you can't skip the sequencing.

The buyers who do well are usually the ones who send a technical team for two weeks. They look at drill core. They meet the district administration. They walk the haul route. They talk to our geologist about the sampling protocol on the alluvial gold blocks along the Indus. Then they negotiate.

One procurement director from a Japanese trading house told me something I keep coming back to: "We don't buy tonnes. We buy the ability to keep buying tonnes in year six." That's the right way to think about off-take from a frontier jurisdiction.

What we're actively offering right now

Current off-take conversations we're open to:

• Antimony concentrate — priority commodity given the 2024–25 price action and Chinese export controls. Multi-year off-take available against our Ghizer and Skardu-district blocks.
• Copper concentrate — porphyry-style mineralisation, early-stage on some blocks, drill-ready on others. Best fit for a smelter group willing to co-invest in confirmatory drilling.
• Tungsten and molybdenum — smaller volumes, defence and specialty steel buyers preferred.
• Placer gold — doré delivery, quarterly tonnages, spot-linked pricing. Different structure entirely from the hard-rock deals.
• Nephrite jade and architectural granite — not critical minerals but active revenue streams, container-load off-take available.

If you want to talk seriously about a buy antimony copper off-take structure, or you're mapping out mineral off-take agreements as part of a broader supply diversification away from China, the conversation starts with a call and ends — hopefully — with your technical people on the ground in Gilgit.

What's your timeline looking like?