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A Toyota Motor/Panasonic battery joint venture will buy lithium from Ioneer’s Rhyolite Ridge mining project and use the metal to build EV batteries in the United States, a media report said.

The binding supply deal was the second in under a month for Ioneer and a strong vote of confidence in a project that is racing to be the first new US source of the battery metal in decades, Reuters reported.

Under the terms of the deal, the report said, Ioneer would supply 4,000 tonnes of lithium carbonate annually for five years to Prime Planet Energy & Solutions (PPES) which was formed by Toyota and Panasonic in 2020 to better compete with battery market leader Contemporary Amperex Technology (CATL).

Supplies are scheduled to begin in 2025, a timeline that depends in part on Ioneer obtaining financing and permitting, Reuters said.

The deal included a commitment from PPES that Ioneer lithium would be used to build EV battery parts inside the US for the domestic EV market. Japan based PPES reportedly had been considering building a battery plant in western North Carolina.

“The whole purpose of this agreement is for this lithium to be used in the United States,” Ioneer executive chairman James Calaway told Reuters.

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By GlobalData

The news agency added a proposed expansion of the US EV tax credit would require that lithium and other EV minerals be sourced domestically or from allies starting as soon as 2023. That potential change, under debate in Congress, had shone a spotlight on the nascent US development plans of battery and automakers.

“Having an agreement with Ioneer provides PPES a first step in securing a US supply of lithium,” Reuters quoted PPES President Hiroaki Koda as saying. He added he had “confidence in Ioneer’s technology”.

The amount of lithium Ioneer would supply PPES was enough to make batteries for about 150,000 EVs annually, though that figure would vary depending on design and other factors, the report said.

Australia-based Ioneer aimed to produce about 21,000 tonnes of lithium in Nevada annually starting in 2025. It signed a supply deal with Ford in mid-July and, last year, with South Korea’s Ecopro, Reuters said.