Lake Resources NL (ASX:LKE, OTCQB:LLKKF)’s Kachi lithium play in Argentina has caught the eye of one of the world’s most prominent carmakers.
Automobile monolith Ford has inked a non-binding memorandum of understanding (MoU) with the clean lithium developer to negotiate an offtake deal.
Nothing’s set in stone, but the agreement positions Ford to pick up roughly 25,000 tonnes of lithium every year from Lake’s Kachi asset as part of a strategic collaboration.
Big-picture: the non-binding offtake memorandum is the second of its kind for Lake, which believes the agreements further de-risk the project for financiers and investors.
Supporting “aggressive EV acceleration”
Today’s announcement comes as the world’s carmakers begin developing the electric vehicles (EVs) of the future.
“As we’ve shared, Ford is sourcing deeper into the battery supply chain,” said Ford’s vice president of EV industrialisation, Lisa Drake.
“This is one of several agreements we’re exploring to help us secure raw materials to support our aggressive EV acceleration,” she continued.
Lake managing director Steve Promnitz echoed Drake’s sentiments in a market announcement today.
“Both Lake and Ford see this as an opportunity for a potential long-term agreement with the ability to scale up environmentally responsible production and participate in Lake’s other projects to ensure high-quality lithium products are available to Ford,” Promnitz explained.
“This MoU with Ford supports Lake’s strategy to be a key independent supplier into global lithium supply chains and ensure the security of supply to customers.”
It’s all about ESG
Lake chairman Stu Crow said project financing was becoming increasingly tied to ESG credentials and that investors, debt providers and offtakers and their customers are demanding that new lithium projects adhere to strict ESG standards.
“Increasing customer and consumer scrutiny around lithium production's environmental and ethical credentials drives our focus on sustainable extraction,” Crow said.
“Lake Resources is committed to integrating sustainable development practices throughout our operations, minimising our environmental footprint, and contributing to a clean energy future.
Expanding offtake horizons
This isn’t the first MoU that Lake’s inked with a lithium offtaker.
Late last month, the company announced it would collaborate with Japanese trading house Hanwa, also to negotiate the offtake of up to 25,000 tonnes of Kachi lithium per annum.
Stu says the MoUs are all part of Lake’s mission to develop a clean lithium supply chain that will meet the global environmental demands for electric vehicles.
“Together with the UK and Canada export credit agencies’ indicative provision of debt finance for around 70% of the Kachi project’s capital requirements, this provides a framework of support for Lake’s TARGET 100 program, which has the goal of producing annually 100,000 tonnes of high purity lithium chemical to market by 2030,” he concluded.