Expect more direct investments by car makers

CAR makers may need to “get out their chequebooks” and take stakes in mines to guarantee materials for their shift to electric vehicles, according to research and consultancy group Wood Mackenzie.
Expect more direct investments by car makers Expect more direct investments by car makers Expect more direct investments by car makers Expect more direct investments by car makers Expect more direct investments by car makers

Inside a 2018 Ford Focus Electric.

MiningNews.Net

The comments follow automotive giant Ford's announcement this week it would invest US$11 billion by 2022 in electrification, and expand its line-up to 40 EVs globally including 16 full battery EVs by 2022.

Wood Mackenzie director metals markets Gavin Montgomery said Ford planned to use NMC lithium-ion batteries in its EVs and it would be a challenge securing supply of the key raw materials, namely lithium, nickel and cobalt.

"Increasingly we are seeing automotive companies starting to negotiate for supply of these materials directly with the mining companies," he said.

"It may be the case that some automotive companies get out their chequebooks and take a stake in mines or new mine projects in order to lock-in future supply."

Toyota Tsusho Corporation, a subsidiary of Toyota, this week made a strategic investment in lithium producer Orocobre.

Toyota Tsusho is backing its Olaroz lithium brine joint venture partner to the tune of US$224 million in a strategic placement to help more than double the production capacity of the operation in Argentina.

The first direct investment by a car manufacturer into an upstream lithium supplier was a A$91 million deal by Chinese automotive giant Great Wall Motor Company in October, to support Pilbara Minerals' Western Australian lithium-tantalum project via offtake agreements, equity and debt finance.

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