Lake Resources shares surge 10pc at the announcement of non-binding MoU with Ford Motor Company for lithium offtake deal.
Clean lithium developer, Lake Resources NL (ASX: LKE; OTC: LLKKF), advises an offtake of approximately 25,000 tonnes per annum of lithium from the Kachi Project has been signed in a non-binding Memorandum of Understanding (MoU) with Ford Motor Company (Ford).
“As we have shared, Ford is sourcing deeper into the battery supply chain,” explained Lisa Drake, Ford’s vice president of EV Industrialisation. “This is one of several agreements we are exploring to help us secure raw materials to support our aggressive EV acceleration.”
Lake Resources specialises in clean, high purity lithium production – utilising efficient disruptive clean technology – which isin high demand due to its use in electric vehicle manufacturing and lithium-ion batteries.
The company’s direct extraction technology for the development of sustainable, high purity lithium from its flagship Kachi Project, as well as three other lithium brine projects in Argentina. The projects are in a prime location within the Lithium Triangle, where 40% of the world’s lithium is produced at the lowest cost.
This method will enable Lake Resources to be an efficient, responsibly sourced, environmentally friendly and cost competitive supplier of high-purity lithium, which is readily scalable, and in demand from Tier 1 electric vehicle makers and battery makers.
Lithium offtake opportunity
This strategic collaboration between Ford and Lake to sit alongside the collaboration with Hanwa (29 March 2022) to fully develop a Clean Lithium Supply Chain to meet the global environmental demands for Electric Vehicles.
“Both Lake Resources and Ford perceive this as an opportunity for a potential long-term agreement with the ability to scale up environmentally responsible production and participate in Lake’s other projects to ensure high-quality lithium products are available to Ford,” added Steve Promnitz, Lake’s Managing Director. “This MoU with Ford supports Lake’s strategy to be a key independent supplier into global lithium supply chains and ensure the security of supply to customers.”
Lithium production
Lake’s Chairman Stu Crow said project financing was becoming increasingly tied to ESG credentials and that investors, debt providers, and off-takers and their customers are demanding that new lithium projects adhere to strict ESG standards.
“Increasing customer and consumer scrutiny around lithium production’s environmental and ethical credentials drives our focus on sustainable extraction,” Crow commented. “Lake Resources is committed to integrating sustainable development practices throughout our operations, minimising our environmental footprint, and contributing to a clean energy future.
“This MoU with Ford follows the Hanwa MoU. Together with the UK and Canada Export Credit Agencies’ indicative provision of debt finance for around 70% of the Kachi project’s capital requirements, this provides a framework of support for Lake’s TARGET 100 Program, which has the goal of producing annually 100,000 tonnes of high purity lithium chemical to market by 2030.”
