Lake Resources share price on watch following lithium deal with car giant Ford

Lake has signed a lithium deal with Ford…

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Key points

  • Lake Resources has signed a non-binding lithium offtake agreement with car giant Ford
  • The two parties have agreed a deal for 25,000 tonnes per annum of lithium from the Kachi Project
  • This follows a near identical deal with Hanwa announced last month

The Lake Resources N.L. (ASX: LKE) share price has been a very strong performer in 2022.

Since the start of the year, the lithium developer’s shares have stormed 70% higher.

The good news for shareholders is that the Lake Resources share price could build on this today following the release of a positive announcement.

Why could the Lake Resources share price rise today?

The Lake Resources share price could be heading higher today after the lithium developer announced a major new offtake agreement.

According to the release, Lake has signed a non-binding memorandum of understanding (MoU) with car giant Ford Motor Company for offtake of approximately 25,000 tonnes per annum (tpa) of lithium from the Kachi Project in Argentina.

Management notes that the strategic collaboration between Ford and Lake will sit alongside the latter’s collaboration with Hanwa to fully develop a clean lithium supply chain to meet the global environmental demands for electric vehicles.

Management commentary

Lake’s Managing Director, Steve Promnitz, commented: “Both Lake and Ford see this as an opportunity for a potential long-term agreement with the ability to scale up environmentally responsible production and participate in Lake’s other projects to ensure high-quality lithium products are available to Ford said. This MoU with Ford supports Lake’s strategy to be a key independent supplier into global lithium supply chains and ensure the security of supply to customers.”

This sentiment was echoed by Lake’s Chair, Stu Crow, who highlighted the company’s green credentials.

He said: “Increasing customer and consumer scrutiny around lithium production’s environmental and ethical credentials drives our focus on sustainable extraction. Lake Resources is committed to integrating sustainable development practices throughout our operations, minimising our environmental footprint, and contributing to a clean energy future.”

“This MoU with Ford follows the Hanwa MoU. Together with the UK and Canada Export Credit Agencies’ indicative provision of debt finance for around 70 percent of the Kachi project’s capital requirements, this provides a framework of support for Lake’s TARGET 100 Program, which has the goal of producing annually 100,000 tonnes of high purity lithium chemical to market by 2030,” Crow added.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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