BMW signs Eur285 million lithium supply deal with Livent

London — Automaker BMW has officially signed a Eur285 million ($334.4 million) lithium supply deal with US-based Livent for the supply of lithium directly to BMW's battery cell manufacturers from 2022 onwards.

BMW said March 30 the deal was part of its plans to accelerate its expansion of e-mobility in the coming years, which would increase the need for sustainable lithium supply for use in battery cells.

By 2030, the automaker plans that at least half of its global sales will come from all-electric vehicles.

Livent initially announced the multi-year deal in February, saying at the time that it would be supplying BMW with both lithium hydroxide and lithium carbonate starting in 2022, although it did not disclose the value of the contract.

Neither BMW or Livent provided the supply volume or the price of the lithium to be supplied through the deal.

Lithium prices have been strong in recent months, with seaborne lithium carbonate prices rising $4,650/mt, or 73%, since the start of 2021 to be assessed by S&P Global Platts at $11,000/mt CIF North Asia on March 26, while lithium hydroxide prices also gained $3,000/mt, or 33.33% over the same period to $12,000/mt CIF North Asia.

BMW already has a Eur540 million lithium supply deal with China's Ganfeng Lithium, which was signed in December 2019 for the supply of sustainable lithium hydroxide from Australian hard-rock deposits.

BMW said it was now broadening its supplier base and sourcing additional lithium from Argentina's salt lakes, saying it was sustainable, as Livent used an innovative method that emphasized sustainable water use and minimized the impact on local ecosystems and communities.

Andreas Wendt, member of the BMW AG management board responsible for its Purchasing and Supplier Network, said that lithium was one of the key raw materials for electromobility.

"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," Wendt said.

Ensuring sustainable critical raw materials

BMW is focused on ensuring its critical raw material supply, like lithium and cobalt, is sustainable and to ensure transparency over the origin and mining methods of the material it sources the minerals directly from producers and makes them available to its battery cell suppliers.

In addition, BMW was the first automaker to join the Initiative for Responsible Mining Assurance (IRMA) in early 2020, which has developed guidelines for responsible extraction of raw materials and defined strict requirements for meeting its environmental and social standards.

It said Livent was now also a pending member of IRMA and would be the first miner in Argentina to commit to undergo a third-party audit in IRMA.

BMW added that it had, along with BASF, commissioned a scientific analysis of the water use of different lithium mining methods in South America from the University of Alaska Anchorage and University of Massachusetts Amherst in late 2020, with results due in Q1 2022.

It said 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.