Ford Motor Company to secure lithium from Lake Resources’ proposed Kachi operation
With the lithium price soaring this year amid forecasts of supply shortages, aspiring clean lithium producer Lake Resources (ASX: LKE) has unveiled an offtake agreement for its Kachi operation with Ford Motor Company.
Under a non-binding memorandum of understanding, Ford is proposing to purchase about 25,000 tonnes a year of lithium chemicals from Lake’s Kachi project in Argentina.
This collaboration with Ford sits alongside Lake’s existing offtake agreement with Japan’s Hanwa that was signed last month.
Lake noted this was the second offtake agreement for Kachi and de-risked the project further for financiers and investors.
Ford vice president of electric vehicle industrialisation Lisa Drake said the company was “sourcing deeper into the battery supply chain”.
“This is one of several agreements we’re exploring to help us secure raw materials to support our aggressive EV acceleration.”
Clean lithium supplier
With financing becoming increasingly tied to environmental social and governance (ESG) principles, Lake chairman Stu Crow said offtake customers were looking for new lithium projects with strict ESG adherence such as Kachi.
“Increasing customer and consumer scrutiny around lithium production’s environmental and ethical credentials drives our focus on sustainable extraction,” he added.
Lake is proposing to develop a lithium brine and chemical operation using technology partner Lilac Solutions’ “truly disruptive” extraction technology.
Compared to traditional brine processing, Lilac’s solution is lower cost and provides higher lithium recovery rates while protecting the local environment and water resources.
Today’s offtake agreement with Ford follows Hanwa agreeing last month to purchase up to 25,000tpa of lithium carbonate equivalent over 10 years from Kachi.
The companies will also establish a strategic collaboration for the development of a clean lithium supply chain to meet environmental demands of the EV, stationary battery and cathode/precursor manufacturing sectors and their end customers.
Mr Crow noted the two offtake agreements along with the indicative debt financing for 70% of Kachi’s estimated development costs provided a “framework of support” for Lake’s Target 100 program.
This program has the goal of producing 100,000tpa of high purity lithium chemical for global markets by 2030.