Ioneer teams up with Dragonfly Energy to boost US lithium supply chain
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Emerging lithium-boron producer Ioneer and leading energy storage company Dragonfly Energy Holdings Corp. (NASDAQ:DFLI) have announced a commercial offtake agreement partnership that will strengthen US battery supply chains and invest in the production and manufacturing of Nevada-sourced lithium.
The 3-year deal will kick off once the company’s Rhyolite Ridge project has been fully completed and commissioned and is capable of producing and delivering product to customers who have annual commitments to purchase in excess of 3,000 tpa.
The price will be based on an agreed market-based price formula, with conditions precedent being the project’s Final Investment Decision.
Ioneer (ASX:INR) says the agreement between the two Nevada-based companies is expected to pave the way for continued investment in the state and provide Dragonfly with a domestic supply of lithium carbonate, a critical component in lithium iron phosphate battery cells.
It’s a real feather in the company’s cap, demonstrating its value to the American supply chain, with its Rhyolite Ridge project one of few in the world where lithium will be extracted and refined locally.
And once federal permitting and construction is complete, the project is expected to quadruple current U.S. lithium output.
“As the world’s demand for lithium in electric vehicle and energy storage increases, the need to secure a reliable, sustainable, and domestic source of lithium is critical,” Ioneer MD and CEO Bernard Rowe said.
“Ioneer is pleased to partner with Dragonfly and deliver these critical materials from Rhyolite Ridge.”
The agreement also moves Dragonfly Energy closer to achieving the company’s mission of establishing a vertically integrated lithium battery cycle, from mining to cell and pack production to recycling.
Dragonfly Energy CEO Dr Denis Phares added that while deploying the company’s innovative dry powder coating cell manufacturing process is exciting, ultimately, cell production is only made possible by access to lithium.
“This agreement gives us the opportunity to bring our entire manufacturing process not only to the U.S. but to Nevada, from mining to manufacturing to recycling,” he said.
The agreement builds on an effort to produce, utilize and recycle lithium, closing the lithium loop in Nevada that Governor Joe Lombardo has prioritized for his administration, detailed in both his recent State of the State address and his Five Year Strategic Plan.
“This agreement between Dragonfly Energy and Ioneer, and hopefully more like it in the future, are vital to our economy as we work to develop this new industry, secure Nevada’s energy independence and close the lithium loop,” Governor Lombardo said.
“In the future, we hope to see more Nevada companies creating innovative partnerships like this one, which will help strengthen our economy and demonstrate how Nevada is the lithium capital of North America.”
This article was developed in collaboration with Ioneer Limited, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.