Ford secures supply of battery minerals from ASX-listed resource companies
Ford Motor Company announced this week it would push through a number of deals to accelerate electric vehicle (EV) manufacturing to meet global demand.
The American multinational automaker is sourcing battery capacity and raw materials to enable it to build 600,000 EVs by the end of 2023, with the annual global EV operating rate expected to increase to more than 2 million by the end of 2026.
As part of this, battery maker China Contemporary Amperex Technology Co., Ltd (CATL) has agreed to provide Ford with a full lithium-iron-phosphate (LFP) battery pack for the Mustang Mach-E model for North America next year, and a battery pack the same for the F-150 Lightnings model in early 2024.
The company has now supplied about 70% of the battery cell capacity needed to support its annual operating rate by the end of 2026.
In reaching 600,000 EVs by the end of 2023, Ford will produce 270,000 Mustang Mach-Es, 150,000 F-150 Lightnings, 150,000 Transit EVs and 30,000 new SUVs for Europe.
Ford President, CEO and Ford Model e President Jim Farley said: “As a result of the company’s EV lineup, which is attracting significant attention and demand, securing raw materials and other components is critical.
“Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need to bring breakthrough EVs to millions of customers,” he said.
Ford expects the compound annual growth rate for EVs to exceed 90% through 2026, more than double the global industry growth forecast.
The auto giant aims to invest more than $50 billion in EVs by 2026 in a growing market with rapidly surging demand.
As part of its need to lock in raw materials, Ford has been negotiating various deals with major global miners and emerging manufacturers.
ioneer to supply lithium
Ford’s latest effort to secure critical materials came on Friday when it was announced a binding offtake agreement had been made with lithium-boron ioneer (ASX:INR) miners.
The auto giant has agreed to buy lithium from Ioneer’s Rhyolite Ridge project in Nevada.
The agreement is for an initial five-year term and Ford will purchase 7,000 tonnes of lithium per year from the project starting in 2025.
Syrah Resources signs MoU for graphite
Another emerging lithium miner Syrah Resources (ASX:SYR) announced Friday that it has signed a non-binding memorandum of understanding with Ford and South Korea-based SK On to evaluate strategic arrangements, including the supply of natural graphite-activated anode material to BlueOval SK. .
BlueOval SK is a joint venture between Ford and SK On, which supplies lithium-ion batteries for Ford’s EV program.
Under the MoU, Syrah, Ford and SK On will continue testing and qualification at Syrah’s vertically integrated Vidalia AAM facility in Louisiana, while also seeking to conclude a binding offtake agreement for natural graphite.
Rio and BHP contribute to Ford’s push
Among major global corporations, mining giant Rio Tinto (ASX:RIO) has signed a non-binding global MoU to develop a more sustainable and secure supply chain for batteries and low-carbon materials to be used in Ford vehicles.
Under the agreement, Ford will be the first customer for the Rincon Rio lithium project in Argentina.
Rio is moving the Rincon into production and will work with Ford towards a significant lithium offtake deal.
In addition, the companies will collaborate to increase the supply of low-carbon aluminum for use in Ford vehicles, including metals manufactured using the zero-carbon ELYSIS™ smelting technology.
The world’s largest mining company BHP (ASX: BHP) has also signed an MoU with Ford. Ford will get the nickel from BHP’s Nickel West operations in WA.
Nickel West is considered to produce some of the most sustainable and lowest carbon intensity nickel in the world.
Multi-year nickel supply agreements could start as early as 2025 and could involve additional commodities from time to time.
Liontown and Lake commit to offtake agreement
Late last month, Liontown Resources (ASX:LTR) announced an offtake agreement with Ford, prompting Liontown’s board to approve the development of the Kathleen Valley lithium project in Western Australia.
Ford aims to buy 150,000tpa of spodumene from the Kathleen Valley over five years, starting in 2024.
Meanwhile, new lithium brine developer Lake Resources (ASX:LKE) reported a non-binding offtake MoU for Kachi’s operations with Ford in April.
Ford is proposing to purchase approximately 25,000 tpa of the lithium chemical from the Kachi Lake lithium brine project in Argentina.
Lake is developing Kachi with a focus on the highest ESG compliance using Lilac Solutions’ disruptive lithium extraction technology, which is based on its proprietary ion exchange process.
Compared to conventional brine processing, Lilac’s technology is lower cost, results in higher lithium recovery and has a much smaller environmental footprint, including returning unused brine to the source.
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