Flat Glass makes photovoltaic, float, engineering and home glass.
It also mines quartz rock and provides engineering, procurement and construction services for PV power plants.
Its PV-grade glass is used to make solar panels.
Under the scope of the MoU Flat Glass and Diatreme will exchange bulk PV-grade silica samples and technical and project information to potentially progress to binding offtake arrangements.
Flat Glass will also look at setting up shop in the region to meet surging demand from the solar power industry for PV glass.
The offtake MoU follows Diatreme's release of a scoping study of the Northern silica project, that shows it has strong potential economic returns and significant scale. Diatreme plans to move the project to feasibility study stage.
Diatreme chief executive officer Neil McIntyre said it was encouraging to have one of the world's leading PV-grade glass manufacturers negotiating directly with the company over silica supply from its project.
"This is a strong vote of confidence in the Northern silica project and its capacity to meet Flat's highly exacting offtake requirements," he said.
"We look forward to progressing this agreement, cementing our project's status as a major and sustainable supplier and delivering long-term jobs and other economic benefits to the Cooktown and Hope Vale region."
Flat Glass deputy chairwoman and deputy general manager Jinhua Jiang said Diatreme was an excellent partner of choice for the company's future expansion plans.
"We look forward to working closely together to progress this MoU into binding arrangements that benefit both parties, in a long-term, mutually beneficial relationship," she said.