Shares in Ioneer (ASX:INR)
firmed a little Monday on the news that the company had struck a lithium supply deal from its Nevada project in the US with the joint battery venture of Toyota Motor Corp and Panasonic Corp.
The deal announced yesterday (Sunday in the US and then on the ASX) is the second supply arrangement Ioneer has struck in the past month and the third all told from the company’s proposed mine in Nevada.
Ioneer signed a supply deal with Ford Motor in mid-July and in February with South Korea’s Ecopro.
The news saw Ioneer shares edge up 1.7% to 57 cents.
The deals will see ioneer will supply lithium from its Rhyolite Ridge mining project and to be used to build electric vehicle batteries in the US.
The deals put Ioneer in prime position to be the first new US source of the battery metal in decades and well ahead of the existing producer, Albemarle which has plans to build a much larger mine on the US East Coast by 2030.
Under the terms of the latest 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 due to start from 2025, a timeline that still 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 US EV market (that’s a commitment essential to Ioneer getting tax credits from the US government.
PPES, which is based in Japan, has reportedly been considering building a battery plant in western North Carolina. That’s where Albemarle is looking to build a new long term mine in the US.
A proposed expansion of the US 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 is under debate in the US Congress.
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.
Ioneer aims to produce about 20,600 tonnes of lithium in Nevada annually starting in 2025. The mine has a planned life of 26 years. It will also produce more than 174,000 tonnes of boric acid a year as well.
Monday also saw news of two new supply deals between Tesla and major Chinese green metal suppliers.
Zhejiang Huayou Cobalt Co. and CNGR Advanced Material Co. signed pricing deals with Tesla supplies until the middle of this decade for supplies of ternary precursor materials for lithium-ion batteries.
Huayou Cobalt started supplying the materials to Tesla from July 1 this year to the end of 2025. CNGR will supply the EV automaker between 2023 and 2025.
Both Huayou and CNGR were among a list of direct suppliers named by Tesla in its 2021 annual impact report. CNGR said in its statement that it supplied Tesla from 2020 until this year.
In June, Huayou Cobalt raised $US2.6 billion from a private placement of shares to fund a nickel project in Indonesia.
Most of the money will be used in Huashan Nickel-Cobalt Indonesia, a joint venture with Tsingshan Holding Group to build a nickel-cobalt hydroxide production base.
The project, which is expected to start in 2025, will be able to process 10.5 million tonnes of nickel laterite a year, producing a forecast 326,000 tons of nickel-cobalt hydroxide products.