ioneer Ltd has sealed a binding offtake agreement with the Ford Motor Company (NYSE:F) to supply lithium from its lithium-boron operations in Rhyolite Ridge Lithium-Boron Project in Nevada.
The deal will support Ford’s ambition to create an end-to-end US-based electric vehicle (EV) supply chain.
Deal to kick off in 2025
Under the five-year binding agreement, due to kick off in 2025, 7,000 tonnes per annum of lithium carbonate will be shifted from ioneer's Rhyolite Ridge Lithium-Boron operation in Nevada, which is around 34% of annual output in the first five years of production.
Ford plans to use ioneer's lithium carbonate to produce batteries for use in Ford electric vehicles through BlueOval SK, the Ford-SK On battery manufacturing joint venture.
The Rhyolite Ridge project is expected to produce an annual average of 20,600 tonnes of lithium carbonate/hydroxide along with approximately 174,400 tonnes of boric acid per year over the its 26-year life.
Bottom of the global cost curve
The dual production of lithium and boric acid allows ioneer not only to produce lithium in the US, but to do so at the bottom of the global cost curve.
Production is planned to start in the second half of 2025 to support urgent requirements for battery materials in the US.
This agreement follows an earlier deal to relieve ioneer of around 34% of its annual lithium carbonate production from Rhyolite Ridge in the first three years of operation.
Ioneer executive chairman James Calaway, said: "The agreement with Ford is a significant milestone for ioneer, highlighting the mature state of the Rhyolite Ridge project development and its ideal position to serve the US supply chain with domestic battery materials.
“Partnering with a recognised world-class automaker that exemplifies the spirit of American innovation is a testament to the quality of our lithium carbonate, and our commitment to the highest environmental standards and sustainability practices.”
American job creation
Ioneer managing director Bernard Rowe added: “Simply put, this strategic relationship means Nevada lithium for American cars, and it will lead to job creation across all levels of the electric vehicle supply chain.
“We look forward to continuing to work with Ford and its partners to help develop a secure and reliable end-to-end US EV industry."
Lisa Drake, Ford Model e vice president, EV Industrialisation, said: “We look forward to developing this new relationship with ioneer.
“Helping unlock lithium in the US will help us support localised production of battery cells going forward and, ultimately, support our efforts to deliver EVs for millions of customers.”