Australian lithium to power BMW

Australian-sourced lithium will exclusively power BMW into its electrified future.

The premium German car-maker yesterday announced a €540 million ($A875m) deal to secure Western Australian lithium via Chinese firm Ganfeng Lithium.

“The projected order volume totals 540 million euros,” BMW’s board member for purchasing, Dr Andreas Wendt, said.

“In this way, the BMW Group is securing 100 per cent of its lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries.”

The contract for Australian lithium-hydroxide, processed from hard-rock lithium deposits at both Mount Marion and Pilgangoora in Western Australia, runs for five years until 2024.

Lithium is one of the driving materials behind the electrification of the automotive industry, with lithium-ion battery cells powering all current production electric cars and most plug-in hybrids. It is used in the cathodes of the rechargeable batteries.

“We aim to have 25 electrified models in our line-up by 2023 – and more than half will be fully electric,” Wendt said.

“Our need for raw materials will continue to grow accordingly. By 2025, for lithium alone, we expect to need about seven times the amount we do today.”

BMW is not the only company concerned about the future sources of rare-earth minerals. Toyota’s mining subsidiary, Toyota Tsusho, owns shares in lithium mining operations in Australia, Argentina and Peru, and last year spent $292 million to buy a 15 per cent stake in Australian company Orocobre to lock down its supply chain.

Both lithium and cobalt continue to be the subject of ethics questions, particularly over using children as miners in impoverished parts of Africa. Isolating its supply to Australia helps BMW to avoid any questions of supply-chain provenance.

“Sustainability is an important aspect of our corporate strategy and plays a central role in expanding electromobility,” Wendt said.

“We are fully aware of our responsibilities: Lithium and other raw materials must be extracted and processed under ethically responsible conditions.

“Ganfeng extracts lithium by mining so-called hard-rock deposits in Australia under the strictest sustainability standards.”

Gangfeng also has lithium operations in Ireland and Argentina, as well as refining operations and a solid-state battery development facility in China.

It has been a big year for the Chinese firm, which also signed a 10-year supply deal with the Volkswagen Group this year.

“Over the next ten years the Volkswagen Group will be launching 70-plus new pure electric vehicles,” Volkswagen’s board member for procurement Dr Stefan Sommer said.

“That means approximately a quarter of the vehicles we deliver in 2025 will be powered by electricity.

“Consequently, there will be a rapid increase in our raw material demand for cell production in the coming years. We must make sure we cover this demand at an early stage.

“Long-term agreements like the one for lithium, a key raw material, that we have just concluded with Ganfeng are therefore of crucial strategic significance for implementing our electric offensive.”