Japanese trading giant Sumitomo Corporation has signed a deal with a Kimberley fluorite mine developer with an eye to forming a joint venture to underpin the project.

The strategic alliance signed on Friday between Sumitomo and Tivan Limited marks the start of exclusive negotiations for a binding joint venture agreement, which the companies hope to formalise by the end of the year.

Such a move would underpin development of Tivan’s Speewah fluorite project near Lake Argyle in the East Kimberley, Australia’s only advanced project of its kind.

Tivan executive chairman Grant Wilson said Tivan had prioritised Japan as a project partner for the past year.

“Our Strategic Alliance with Sumitomo Corporation is the culmination of these efforts,” he said.

“Sumitomo is a company and group that we deeply respect, with foundational principles that date back over 400 years.

“We look forward to progressing the Speewah fluorite project together, with enterprising spirit and a common vision of shared prosperity.”

Under the deal Sumitomo would gain sole distributor rights to market Speewah’s fluorspar in Asia, with a prescribed amount set aside for Japanese customers.

The Japan Organisation for Metals and Energy Security will also be privy to the two parties’ discussions.

The agency’s role is to secure a stable supply of minerals for Japan’s economic needs.

Lycopodium is close to completing a pre-feasibility study for the 37.3-million-tonne Speewah resource, for which studies to date have for an 8.6-million-tonne portion containing a high-grade 22.8 per cent calcium fluoride product, from which fluorspar (fluorite) is derived from.

The report, expected to be finished in July, comes as fluorspar prices rise due to reserve depletion in China and supply constraints.

A market outlook produced by supply chain analyst Benchmark found fluorspar demand was expected to outstrip supply next year, in part due to the high cost of mine development and volatile prices.

China currently controls about 60 per cent of the fluorspar market.

Fluorspar is used in semiconductors and electric vehicle batteries, as well as traditional uses in refrigerants and steelmaking.