Eye on Lithium: GM just prepaid Livent $198m for a guaranteed six-year supply of lithium hydroxide
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All your ASX lithium news for Wednesday, August 3.
General Motors Co (GM) is prepaying Livent Corp $198 million for a guaranteed six-year supply of lithium.
Prepaying cash for a guaranteed metal supply is almost unheard of in the mining industry – and this deal shows just how worried keen GM is to secure sufficient raw materials to meet its goal of producing 1 million electric vehicles (EVs) annually by 2025.
The broad terms of the deal were announced last week, but yesterday Livent announced the financial terms.
“GM is certainly thinking for the long term here,” CEO Paul Graves said.
“By making the advanced payment, they are clearly giving us the commitment that we were looking for.”
Livent will supply the automaker with battery-grade lithium hydroxide made primarily from lithium extracted at its brine-based operations in South America, over a six year period beginning in 2025 with the goal of transitioning 100% of its downstream lithium hydroxide processing for GM to North America.
Plus, the prepayment is expected to assist Livent in expanding its North American capabilities.
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A total of 54 stocks were in the green, 46 were flat and 31 were red.
The Aussie hard rock lithium major has just sold a 5,000t cargo of 5.5% spodumene via its auction platform for $US6,350/t – its equal best result ever.
That equals an implied price of $US7,012/t on a 6% basis (the industry benchmark).
“Strong interest continues to be received in both participation and bidding by a broad range of qualified buyers with a total of 67 bids received online during the 30 minute auction window,” PLS says.
This is a slight increase on the most recent July auction result, which saw 5,000t (5.5%) sell for US$6,188/dmt. There were also over 25 more bids placed this time around.
On June 23, a bid of US$6350/dmt for a 5000t shipment of 5.5% Li2O lithium concentrate was so appealing PLS accepted the offer ahead of a planned sixth Battery Material Exchange auction.
It demolished its record price for spodumene at the time.
PLS boss Dale Henderson recently used these words to describe the company’s decision to add another 100,000t of capacity at its Pilgangoora project which will take its spodumene production potential to as much as 680,000t.
A further enhancement to 1Mtpa is being studied.
In the June quarter, average realised selling prices rose 61% to US$4,267/dmt, boosting the company balance sheet by $589.3m to an incredible $874.2m.