German luxury vehicle company BMW announced on March 30 that it has signed a USD$334 million deal with US-based Livent for the supply of lithium carbonate and hydroxide for battery cell production from 2022. The deal represents BMW’s second lithium supply deal.
Strong lithium prices
Lithium prices have been advancing in recent months. The seaborne lithium carbonate prices had surged to $4,650/mt, or 73% from the start of 2021 to reach $11,000/mt CIF North Asia on March 26 as assessed by S&P Global Platts. The lithium hydroxide prices had also tacked on $3,000/mt, or 33.33% to reach $12,000/mt CIF North Asia during the same time period.
Lithium supply deal with Livent
BMW announced on March 30 that it has officially signed a Eur285 million ($334.4 million) lithium supply deal with Livent.
Livent had announced the deal in February, saying that it would be supplying both lithium hydroxide and lithium carbonate to BMW starting in 2022. However, BMW and Livent did not disclose the supply volume or the price of the lithium to be supplied through the deal.
50% sales to be electric by 2030
The automaker plans to have at least half of its global sales from all-electric vehicles by 2030. This multi-year supply deal with Livent was part of BMW’s plans to accelerate the expansion of e-mobility in the coming years, which also translated to higher demand for sustainable lithium supply for use in battery cells.
BMW’s second Li supply deal
The supply deal with US-based Livent is BMW’s second lithium supply deal. In December 2019, the automaker had inked a Eur540 million lithium supply deal with China’s Ganfeng Lithium for supplying sustainable lithium hydroxide from Australian hard-rock deposits.
BMW said that the broadening of its lithium supply base by inking deal with Livent was done as Livent uses an innovative method that emphasized sustainable water use and minimized the impact on local ecosystems and communities.
Member of the BMW AG management board responsible for its Purchasing and Supplier Network, Andreas Wendt said: “By sourcing lithium from a second supplier, we are securing requirements for production of our current fifth generation of battery cells. At the same time, we are making ourselves technologically, geographically and geopolitically less dependent on individual suppliers.”
Focus on sustainable raw materials supply
BMW has been ensuring that its critical raw material supply, like lithium and cobalt, is sustainable. The company is also focused on retaining transparency over the origin and mining methods of the material by sourcing the minerals directly from producers to its battery cell suppliers.
Member of IRMA
BMW had joined the Initiative for Responsible Mining Assurance (IRMA) in early 2020. IRMA has guidelines for responsible extraction of raw materials and has strict requirements for meeting its environmental and social standards. BMW noted that Livent was currently a pending member of IRMA.
Study on water use with BASF
BMW announced that along with BASF, it had commissioned a study from the University of Alaska Anchorage and the University of Massachusetts Amherst in late 2020. The results of this scientific analysis of the water use of different lithium mining methods in South America are due in Q1 2022.
BMW said that “The study would investigate the impact of lithium mining on local water resources and the surrounding ecosystems, with the aim of improving the scientific understanding of the relationship between fresh water and lithium brine aquifers, evaluating different technologies and providing a foundation for assessing sustainable lithium mining.”