what is an offtake agreement
DEFINITION of 'Offtake Agreement'. An agreement between a producer of a resource and a buyer of a resource to purchase/sell portions of the producer's future production.An offtake agreement is normally negotiated prior to the construction of a facility such as a mine in order to secure a market for the future output of the facility.If lenders can see the company will have a purchaser of its production, it makes it easier to obtain financing to construct a facility. Next Up.REAKING DOWN 'Offtake Agreement'. Offtake agreements are frequently used in natural resource development, where the capital costs to extract the resource is signficant and the company wants a guarantee that some of its product will be sold.