The Ioneer Ltd (ASX: INR) share price has been a strong performer on Wednesday.
In morning trade, the US based lithium-boron producer's shares are up 10% to 62.5 cents.
Why is the Ioneer share price racing higher?
Investors have been bidding the Ioneer share price higher today following the release of an update on a lithium offtake agreement at its Rhyolite Ridge Lithium-Boron Project in Nevada.
According to the release, EcoPro Group, a major cathode supplier for global battery manufacturers, has agreed to increase its offtake volume with Ioneer to 7,000 tonnes per annum. This compares to 2,000 tonnes per annum previously and is the maximum amount under the June 2021 binding agreement.
EcoPro expects to convert this lithium carbonate into high purity lithium hydroxide at its recently complete integrated cathode plant in Korea.
Management notes that this agreement represents approximately 34% of Ioneer's annual lithium carbonate production from Rhyolite Ridge in the first three years of operation. It is expecting to produce an annual average of approximately 20,600 tonnes of lithium carbonate per year over the 26-year mine life.
Management commentary
Ioneer's Managing Director, Bernard Rowe, commented: "We are delighted that EcoPro Innovation has increased their lithium carbonate offtake commitment from Rhyolite Ridge. As a major cathode supplier for global battery manufacturers EcoPro Group is an ideal partner for Ioneer. We are encouraged to support the US car manufacturing industry and look forward to continuing to work with EcoPro Group in these endeavours."
This sentiment was echoed by EcoPro Innovation's President, Anthony Kim.
He said: "We have always had great relationship with ioneer and we are pleased to strengthen our partnership with ioneer by increasing lithium carbonate offtake volume. We, EcoPro as a group, have intentions to expand overseas to support environmental policies such as carbon neutralization and net zero emission. With ioneer as a partner, we look forward to contributing to the electrification of transportation in the USA."
