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The
binding supply deal, announced on Sunday, is the second in less
than a month for ioneer and a strong vote of confidence in a
project that is racing to be the first new U.S. source of the
battery metal in decades.
Under the terms of the deal, ioneer will supply 4,000 tonnes of
lithium carbonate annually for five years to Prime Planet Energy
& Solutions (PPES), which was formed by Toyota and Panasonic in
2020 to better compete with battery market leader Contemporary
Amperex Technology Co Ltd (CATL).
Supplies are slated to begin in 2025, a timeline that depends in
part on ioneer obtaining financing and permitting.
The deal includes a commitment from PPES that ioneer's lithium
will be used to build EV battery parts inside the United States
for the U.S. EV market. PPES, which is based in Japan, has
reportedly been considering building a battery plant in western
North Carolina.
"The whole purpose of this agreement is for this lithium to be
used in the United States," James Calaway, ioneer's executive
chairman, told Reuters.
A proposed expansion of the U.S. EV tax credit would require
that lithium and other EV minerals be sourced domestically or
from allies starting as soon as next year. That potential
change, which is under debate in Congress, has shown a spotlight
on the nascent U.S. development plans of battery and automakers.
"Having an agreement with ioneer provides PPES a first step in
securing a U.S. supply of lithium," said PPES President Hiroaki
Koda, who added he has "confidence in ioneer's technology."
The amount of lithium that ioneer will supply PPES is enough to
make batteries for about 150,000 EVs annually, though that
figure would vary depending on design and other factors.
Australia-based ioneer aims to produce about 21,000 tonnes of
lithium in Nevada annually starting in 2025. It signed a supply
deal with Ford Motor in mid-July and last year with South
Korea's Ecopro.
The Rhyolite Ridge project has faced push back from some
conservationists who worry it could harm a rare flower known as
Tiehm's buckwheat, though ioneer has said it believes it can
safely extract lithium while also protecting the plant.
"We've figured out how we can build the mine and not touch the
Tiehm's buckwheat," said Calaway.
(Reporting by Ernest Scheyder in Houston; Editing by Daniel
Wallis)
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