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Australian firm ioneer has reached a binding offtake agreement with Prime Planet Energy & Solutions for lithium produced from the Rhyolite Ridge mining project in southern Nevada, US.

Prime Planet Energy & Solutions, which is a joint battery venture of Toyota Motor and Panasonic, will use the product to manufacture electric vehicle (EV) batteries in the country.

Under the five-year agreement, ioneer will supply 4,000tpa of lithium carbonate from the Rhyolite Ridge lithium-boron operation. This represents 19% of annual output in the project’s first five years of production.

Japan-based PPES has been looking to build a battery plant in western North Carolina, US, reported Reuters.

Calaway was cited by the news agency as saying: “The whole purpose of this agreement is for this lithium to be used in the United States.”

PPES plans to incorporate refined lithium into lithium-ion batteries for EVs and promote electrification in the US.

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By GlobalData

PPES president Hiroaki Koda said: “I am delighted to have a great partnership with ioneer in the battery supply chain that can promote vehicle electrification toward realising a carbon-neutral society.

“Having an agreement with ioneer provides PPES a first step in securing a US supply of lithium, one of the most important parts for corresponding with the fast growing electrified vehicle industry.”

ioneer plans to start production from the project in 2025. The mine is expected to have operational life of 26 years.

ioneer executive chairman James Calaway said: “This and the previously announced Ford and EcoPro agreements solidify ioneer’s focus on the US Electric Vehicle supply chain infrastructure.”

The Rhyolite Ridge project is anticipated to have an average production capacity of around 20,600tpa of lithium carbonate/hydroxide and nearly 174,400tpa of boric acid.