ioneer Ltd has signed a binding offtake supply agreement with the Prime Planet Energy & Solutions joint venture between Toyota Motor (NYSE:TM) Corporation and Panasonic Corporation (NYSE:PC), to supply lithium carbonate from its Rhyolite Ridge Lithium-Boron Project in Nevada.
This agreement will see ioneer deliver 4,000 tonnes annually of lithium carbonate to PPES over a five-year term.
Support of US EV chain
PPES will utilise ioneer’s lithium carbonate to produce batteries for use in US electric vehicles and this will promote electrification in the US market.
As well as delivering on the company’s initiatives, ioneer-supplied lithium will be produced, refined and incorporated into lithium-ion batteries by PPES in support of the US end-to-end electrified vehicle supply chain.
“Another key milestone”
ioneer’s executive chairman James Calaway said: “ioneer is grateful to announce another key milestone for our company with a lithium carbonate offtake agreement with PPES.
"PPES is a world-class organisation, and we look forward to being their trusted partner.
"This and the previously announced Ford and EcoPro agreements solidify ioneer’s focus on the US electric vehicle supply chain infrastructure.
"We look forward to providing lithium materials to PPES and all our offtake partners for their growth in the EV global market.”
Battery production company
PPES is a battery production company established through joint investment between Toyota, the world's largest automotive manufacturer by revenue, and Panasonic, a leading battery manufacturer.
The five-year binding agreement is for a total of 4,000 tonnes per annum of lithium carbonate from ioneer’s Rhyolite Ridge Lithium-Boron operation in Nevada. It represents around 19% of annual output in the first five years of production.
ioneer is expected to produce an annual average of approximately 20,600 tonnes of lithium carbonate/hydroxide along with about 174,400 tonnes of boric acid per year over the Rhyolite Ridge project’s 26-year life.
The dual production of lithium and boric acid allows ioneer to not only produce lithium in the US, but to do so at the very bottom of the global cost curve.
ioneer anticipates commencing production in 2025 to support urgent requirements for battery materials in the United States.
“Securing US supply of lithium”
PPES’s president Hiroaki Koda said: “I am delighted to have a great partnership with ioneer in the battery supply chain, that can promote vehicle electrification toward realising a carbon-neutral society.
"Having an agreement with ioneer provides PPES a first step in securing a US supply of lithium, one of the most important parts for corresponding with the fast-growing electrified vehicle industry.
"We have confidence in ioneer’s technology of refining sedimentary sourced lithium and their competitiveness and expect it to strengthen the PPES supply chain.”
Agreement details
This agreement follows the two earlier binding offtake agreements and, in total represents the completion of pre-production lithium carbonate supply commitments it currently intends to make for Rhyolite Ridge.
Key terms of the agreement with PPES include:
- Product: Lithium carbonate.
- Contract duration: 5 years.
- Volume: 4,000 tpa.
- Price: Adjusted quarterly based on agreed price formula.
- Currency: USD per tonne.
- Conditions precedent: ioneer’s Final Investment Decision.
About Rhyolite Ridge
Rhyolite Ridge is the only known lithium-boron deposit in North America and one of only two known such deposits in the world.
A definitive feasibility study (DFS) completed in 2020 confirmed Rhyolite Ridge as a world-class lithium and boron project that is expected to become a globally significant, long-life, low-cost source of lithium and boron vital to a sustainable future.
In September 2021, ioneer entered a 50/50 joint venture agreement with Sibanye Stillwater Ltd to advance the Rhyolite Ridge project. ioneer will be the operator of the project, which is expected to come on stream in 2025.