The Elements of Innovation Discovered
The Elements of Innovation Discovered
Automaker cuts deals for aluminum, battery materials, copper Metal Tech News - July 27, 2022
Ford is working with mining companies for the metals needed for its growing line of electric vehicles, such as this F-150 Lightning at the company's Rouge EV Center in Dearborn, MI.
An ELYSIS aluminum ingot produced without any direct greenhouse emissions at an industrial research and development center in Quebec, Canada.
Looking to secure the materials required for the lithium batteries that will deliver power to more than 2 million electric vehicles per year by 2026, Ford Motor Company is adding the clout of its Blue Oval emblem to mining companies and projects that can offer low-carbon supplies of the aluminum, battery materials, and copper needed to build its envisioned e-mobility future.
"Ford's new electric vehicle lineup has generated huge enthusiasm and demand, and now we are putting the industrial system in place to scale quickly," said Ford President and CEO Jim Farley. "Our Model e team has moved with speed, focus and creativity to secure the battery capacity and raw materials we need to deliver breakthrough EVs for millions of customers."
Toward its goal of scaling up its annual production of electric cars, trucks, vans, and SUVs to 600,000 by the end of next year and 2 million by the end of 2026, Ford has committed to invest more than $50 billion in its EV business and the supply chain that will support it over the next 4.5 years.
Having already secured enough battery production capacity through partnerships with global manufacturers to meet its 2023 EV production goal, Ford has signed a series of supply agreements and memorandums of understanding to help ensure it has enough raw materials to rapidly ramp up to its 2026 target.
"Our team has been actively engaged with partners in the United States and around the world," said Lisa Drake, Ford Model e vice president, EV Industrialization. "We will move fast in the key markets and regions where critical supplies are available, meeting with government officials, mining companies and processors and signing MOUs and agreements that reflect Ford's ESG expectations and underpin Ford's plan to bring EVs to millions."
More and less nickel
Ford's rapid move up the lithium battery materials supply chain includes locking in contracts with some of the world's largest mining companies to ensure it has enough nickel to meet its EV ambitions.
While nickel is a relatively abundant metal, the global transition to zero-carbon transportation and electricity is creating enormous new demand and competition for this critical lithium-ion battery ingredient.
The International Energy Agency estimates that the EV and low-carbon energy sectors alone could need as much as 2.2 million metric tons of nickel per year by 2030, which would be nearly as much as all other uses of nickel combined.
This means that over the next few years, miners will need to double nickel production to meet the EV battery demand, as well as the need for nickel for stainless steel and other uses.
In order to meet its own electric mobility goals in a highly competitive market, Ford has signed nickel contracts with global miners Vale, BHP, and Huayou Cobalt.
Like many of its global automaking peers, however, Ford is also reducing the amount of nickel it will require over the coming years by leaning more on shifting away from the nickel-cobalt-manganese (NCM) lithium-ion batteries currently powering its EVs to lithium-iron-phosphate (LFP) batteries.
While LFP batteries do not have the energy density of their NCM counterparts, thus less range for the EVs they will go in, they charge faster, are cheaper to produce, and are safer than the traditional nickel-rich lithium-ion batteries.
For Ford, the addition of LFP batteries means that it can make its standard range EVs more affordable.
By putting less demand on rarer metals such as nickel and cobalt, bringing LFP batteries into the mix will also likely help hold down the costs of the NCM batteries that will go into longer-range Ford cars, trucks, vans, and SUVs.
Unlocking U.S. lithium
Whether based on nickel or iron cathode chemistries, all the batteries powering the popular Mustang Mach-Es, F-150 Lightning pickups, Transit vans, and other Ford EVs over the coming years will need lithium.
To ensure it has a plentiful supply of lithium-ion batteries' namesake ingredient, Ford has cut deals with mining companies with projects in Australia, Argentina, and the U.S.
In June, Ford entered into an agreement to offtake up to 150,000 metric tons of spodumene concentrate – a hardrock source of lithium – per year from Liontown's Kathleen Valley project in Western Australia.
"Ford continues working to source more deeply into the battery supply chain to meet our goals of delivering more than 2 million EVs annually for our customers by 2026," Drake said upon the June 28 announcement of the five-year lithium contract.
This move to the very front end of the EV battery supply chain also includes an agreement to buy 7,000 metric tons of lithium carbonate per year from ioneer Ltd.'s Rhyolite Ridge lithium-boron project in Nevada.
This would account for roughly one-third of Rhyolite Ridge's estimated annual lithium production once the mine goes into operation, which is expected before the end of 2025.
"Partnering with a recognized world-class automaker that exemplifies the spirit of American innovation is a testament to the quality of our lithium carbonate, and our commitment to the highest environmental standards and sustainability practices," said James Calaway, executive chairman of ioneer.
In addition to ESG credentials, the deal with ioneer helps Ford develop domestic supply chains for its American battery and EV manufacturing.
"Helping unlock lithium in the U.S. will help us support localized production of battery cells going forward and, ultimately, support our efforts to deliver EVs for millions of customers," Drake said.
Toward its goal of supporting U.S. lithium production, Ford is also exploring the potential to source battery-grade lithium from Compass Minerals' Ogden, Utah, solar evaporation facility.
Compass already produces salt, sulfate of potash, and magnesium chloride from evaporating waters drawn from the Great Salt Lake. The company is now looking to produce as much as 40,000 metric tons of lithium carbonate-equivalent per year from its Great Salt Lake facility, including 10,000 metric tons per year starting in 2025.
"We are pleased with the continued interest in our lithium resource and look forward to executing on our plan to begin supplying the market in 2025," said Chris Yandell, head of lithium for Compass Minerals.
Powerhouse mining deal
In addition to securing the critical battery materials for its EVs, Ford is endeavoring to secure low-carbon supplies of the aluminum and copper vital to building its growing line of zero-emissions vehicles.
Toward this overarching goal, the Detroit automaker has signed a non-binding MOU with Rio Tinto to jointly develop more sustainable and secure automotive supply chains.
"Rio Tinto is uniquely positioned to work with companies like Ford to develop more sustainable, traceable and secure supply chains," said Rio Tinto Chief Commercial Officer Alf Barrios.
One of the primary objectives between the automotive and mining powerhouses is to strengthen the supply of low-carbon aluminum that will make Ford EVs lighter and more efficient.
The production of aluminum is notorious for the enormous amount of carbon dioxide that is emitted during the smelting process. ELYSIS, a revolutionary aluminum smelting technology being developed by Rio Tinto and Alcoa, eliminates all direct greenhouse gases from this process, and instead produces oxygen.
Coupled with Rio Tinto's hydro-powered operations in Canada, ELYSIS aluminum could significantly reduce the pre-drive carbon footprint of the iconic Ford F-150, the world's first all-aluminum body pickup.
The high-strength aluminum alloys used in the F-150 help improve performance and save weight, helping it to tow heavier loads, accelerate quicker, and reduce stopping distances. Advantages that are being passed on to the Lightning, the next generation of Ford's iconic truck.
Ford and Rio Tinto will also work to develop secure, domestic supply chains for copper produced with a low-carbon footprint.
"This is a powerful example of how Ford's proven scale and industrial expertise can be leveraged to accelerate the shift to EVs," said Ford Motors Chief Industrial Platform Officer Hau Thai-Tang. "We're applying years of shared knowledge and a strong relationship to support production of models customers already know and love – and potentially to help create a new generation of EVs for millions of customers."
Under the agreement with Rio Tinto, Ford is exploring the potential of becoming the foundation customer for the global mining company's newly acquired Rincon lithium project in Argentina.
Having finalized the $825 million acquisition of Rincon Mining in March, Rio Tinto is now working on a detailed plan to bring its new large undeveloped lithium brine project in the Salta Province of Argentina into production.
Despite being one of the largest mining companies on Earth, Rio Tinto says Ford's backing of burgeoning technologies such as ELYSIS and mine development projects such as Rincon help to progress its commitment to decarbonize the mined materials it is feeding into supply chains.
"We are investing to grow in materials needed for the energy transition, and in technology and partnerships to decarbonize our business and value chains," said Barrios. "We welcome the opportunity to strengthen our long-term relationship with Ford to support its sustainability goals."
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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