Ford signs lithium supply agreement with Lake Resources

Ford has signed a non-binding offtake agreement with lithium producer Lake Resources. The agreement provides for the delivery of approximately 25,000 tons of lithium per year from the Kachi project in Argentina.

However, Lake Resources’ announcement does not specify when Ford’s supply from the Kachi mine could begin or the financial scope of any binding supply agreement. For Lake Resources, this is the second letter of intent on the Kachi project; The Chinese group Hanwa also wants to buy lithium carbonate from Lake Resources.

The reluctance with hard data and binding contracts has a simple reason: the mine in the Andes in the far west of Argentina is not yet in operation. It is a brine mining operation that extracts potassium and lithium carbonate. After the extraction of the materials, the water must be returned to the brine basin, which is 400 to 800 meters deep.

The gate Online mining data lists the project 22 kilometers west of El Peñon still at the “pre-feasibility” stage. A feasibility study is cited, according to which Lake increased the possible production volume from 25,000 to 50,000 tons of lithium carbonate equivalent (LCE). However, Lake still lists 25,500 tonnes of LCE as planned production on its own homepage. The new resource estimate is based on drill results. Thus, Ford would take off about half of the year’s production.

As we shared, Ford is to source deeper in the battery supply chainsaid Lisa Drake, Ford vice president of electric vehicle industrialization. “This is one of many agreements that we are exploring to help us secure raw materials to support our aggressive EV acceleration,” she added.

“Lake and Ford see this as an opportunity for a potential long-term agreement with the possibility of increasing environmentally friendly production and participating in Lake’s other projects to ensure high quality lithium products are available for Ford,” said Lake general manager Steve. Promnitz. “This MoU with Ford supports Lake’s strategy to be a key independent supplier in global lithium supply chains and to provide security of supply for customers.”

lakeresources.com.au (PDF), lakeresources.com.au (project website), miningdataonline.com