Ford signs 5-year supply deal with Australian lithium maker Liontown

According to foreign media reports, Australian lithium business Liontown Resources has signed a lithium supply agreement with Ford Motor.Earlier this year, the company signed similar deals with Tesla andelectric vehiclebattery maker LGES.

Image credit: Ford Motors

On June 29, Liontown said it would supply Ford with 150,000 dry metric tons of spodumene concentrate annually for five years from its flagship project in the Kathleen Valley in Western Australia.The Australian miner is expected to start supplying Ford with spodumene in 2024, supplying 75,000 dry metric tons in the first year of the deal, increasing to 150,000 dry metric tons in the third year.

Shares in Liontown, a small miner chaired by Australian entrepreneur Tim Goyder, surged 17 per cent in early trade on the day but closed up 5.6 per cent by midday, giving it a market value of about $2.5 billion.Currently, the global goal of decarbonization and achieving net-zero carbon emissions is driving demand for electric vehicles, which has also pushed the price of battery metals such as lithium to record levels.

Ford, which has bet heavily on electric vehicles, said in March that it would increase spending on electric vehicles by two-thirds to $50 billion by 2026 and separate its electric vehicle unit from its traditional internal combustion engine business. Better to compete with Tesla.

Ford has a joint venture with SK On, an electric vehicle battery maker owned by South Korea's SK Innovation, called BlueOvalSK, which plans to have a batteryproduction capacity.

Liontown said it had secured A$300 million ($207.21 million) in debt financing from a Ford subsidiary to further develop the Kathleen Valley project.