Australian minerals explorer Orocobre Ltd has reached a joint venture deal with a sibling company of Toyota Motor Corp to supply the Japanese automaker with lithium for its next-generation hybrid vehicles.
Toyota Tsusho Corporation, 21.8 percent owned by Toyota, will provide US$4.5 million (AUD$4.9 million) to fund the completion of the Definitive Feasibility Study of Orocobre’s flagship Salar de Olaroz Lithium-Potash Project in Argentina.
Orocobre will operate the venture and will continue to own 75 percent of the Olaroz Project.
At an estimated cost of $85-$110 million, it is expected to produce 15,000 tonnes of lithium carbonate equivalent per year, making it the fifth-largest lithium carbonate producer for batteries in the world.
The final studies and pre-development activities are expected to be completed by third quarter 2010 with a possible project start date later in the year.
Orocobre managing director, Richard Seville, said Toyota Tsusho was a perfect fit as a development partner for the Olaroz Project.
“Toyota Tsusho becoming our strategic partner allows Olaroz direct access to Toyota Motor Corporation and its partners such as Panasonic and Sanyo.“These companies have significant expertise and understanding of supply requirements in large format lithium-ion batteries for the automotive industry and consumer sector, and that will add greatly to our understanding of end-user requirements and demand.”
Mr Seville said as electric car demand continues to grow Toyota Motor Corporation would have the opportunity to become a cornerstone off-take customer.
Toyota Tsusho said its strategy was to invest in the Olaroz Project in order to secure access to competitive, low-cost lithium carbonate production in a timeframe closely aligned with worldwide lithium requirements for hybrid and electric vehicles.
“The size and quality of the deposit is world-class and we believe will produce high purity, battery-grade materials required for the global battery industry, at a cost that is competitive with existing lithium brine producers in South America.“Global demand for lithium across the electronics, industrial and automotive sectors continues to grow and we are very pleased to have secured access to a project of this size and quality, with a strong and focused development partner,” it said in a statement.
CarAdvice reported earlier in the week that Toyota aims to produce one million hybrids per year by 2011 which will mean a sharp increase in its lithium demands.
Toyota is favouring lithium-ion batteries over its current nickel-metal-hydride units for future models because of their greater energy-to-weight ratio – which leads better range and efficiency.
The Prius Plug-In Hybrid will be among Toyota’s first lithium-ion powered vehicles when it enters full-scale production, believed to be in 2012.