Ford signs lithium supply deal with Lake Resources in Argentina

Ford Motor Co said it has signed a preliminary agreement to buy lithium from a Lake Resources NL plant in Argentina, marking the first time the automaker has publicly announced where it will source electric vehicle battery metal.

Ford Motor Co on Monday said it had signed a preliminary agreement to buy lithium from a Lake Resources NL plant in Argentina, marking the first time the automaker has publicly announced where it will source electric vehicle battery metal.

The deal is a major bet by Ford on direct lithium extraction (DLE), a relatively new technology that filters metal from brines and uses far less land than surface mining and evaporation ponds.

General Motors Co, BMW, Stellantis NV and other Ford rivals have signed their own supply agreements with companies planning to use DLE technology.

Ford aims to buy 25,000 tonnes per year of white metal from Lake’s Kachi project in northern Argentina, which is being developed with private mining start-up Lilac Solutions Inc.

Lilac’s technology, like all DLE technologies, has yet to work commercially, although it has backing from Bill Gates’ Breakthrough Energy Ventures and other prominent investors.

The agreement between Lake and Ford is non-binding and should be finalized to include a specific delivery schedule.

Ford Chief Executive Jim Farley said in February that his company was working on agreements to secure the supply of key raw materials for batteries such as lithium, nickel, rare earths and copper.

“This is one of many deals we are exploring to help Ford secure raw materials to support our aggressive acceleration plan for electric vehicles,” Ford spokeswoman Jennifer Flake said.

Sydney-based Lake Resources is listed on the Australian Stock Exchange, which requires supply agreements to be made public.

The Kachi project in northern Argentina near the Chilean border is expected to cost around $540 million and open by 2024.

Lilac’s technology uses 10 tons of water for every ton of lithium produced. Lilac said it could use a desalination plant to filter brackish water to avoid using potable water.

(Reporting by Ernest Scheyder in Houston; Additional reporting by Ben Klayman in Detroit; Editing by Aurora Ellis)

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