Emerging lithium producer ioneer (ASX: INR) has signed a binding agreement with Prime Planet Energy & Solutions for offtake from its Rhyolite Ridge lithium-boron project in Nevada.
Prime is a battery company joint venture between car manufacturer Toyota Motor Corporation and battery maker Panasonic.
The five-year deal is for a total of 4,000 tonnes per annum of lithium carbonate, representing approximately 19% of annual output expected from Rhyolite Ridge in the first five years of production.
Lithium supplied by ioneer will be produced, refined and incorporated by Prime into lithium-ion batteries in support of the end-to-end US electric vehicle supply chain.
Earlier offtake deals
The Prime agreement follows ioneer’s earlier offtake deals with motor giant Ford and EcoPro Group to promote the US electric vehicle industry.
The Ford deal was signed last month for the supply of 7,000tpa lithium over an initial five-year term, representing about 34% of planned lithium carbonate production from Rhyolite Ridge for the first five years.
Ford will purchase the lithium on an agreed market-based price formula, adjusted quarterly.
In February, EcoPro confirmed it would take 7,000tpa, increased from an earlier offtake commitment of 2,000tpa and representing another 34% of planned production.
All three offtake deals represent the completion of pre-production lithium carbonate supply commitments for Rhyolite Ridge.
Rhyolite Ridge is expected to produce an average of approximately 20,600tpa of lithium carbonate along with approximately 174,400t of boric acid per year over a 26-year life.
A definitive feasibility study estimated US$785 million would be required to develop the project, which has a current resource of 146.5 million tonnes lithium and boron and 60Mt in reserves.
The project is anticipated to bring US$422 million in annual revenue with earnings before interest tax depreciation and amortisation of around US$288 million.
Dual production of lithium and boric acid will allow ioneer to produce lithium at the bottom of the global cost curve.
ioneer expects first production in 2025 to support the growing urgency for battery materials in the US.