Home / Sector / Materials Shares / Ioneer share price leaps 8% on Ford supply agreement

Ioneer share price leaps 8% on Ford supply agreement

Another 34% of the Rhyolite Ridge Project's expected output has been snapped up.

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Brooke Cooper
Brooke has been a Motley Fool contributor since early 2021. She holds a Bachelor of Communication with specialisations in journalism and international studies from Charles Sturt University. Brooke aims to inform and excite Aussies keen to grow their wealth by investing in ASX companies. When not writing or researching, you'll likely find Brooke gallivanting around South East Queensland.
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Key points
  • The Ioneer share price is leaping 8% on Friday to trade at 53.5 cents
  • It comes on news the company has entered an offtake agreement with automotive giant, Ford
  • Ford has agreed to buy 7,000 tonnes of lithium from the project each year for five years

The Ioneer Ltd (ASX: INR) share price is taking off this morning on news the company has entered an offtake agreement with car manufacturing monolith, Ford.

The agreement will see the ASX-listed lithium developer supplying 7,000 tonnes of lithium each year for Ford's electric vehicles (EVs).

At the time of writing, the Ioneer share price is 53.5 cents, 8.08% higher than its previous close.

Let's take a closer look at today's news from the All Ordinaries Index (ASX: XAO) lithium stock.

Happy woman on her phone while her electric vehicle charges.

Image source: Getty Images

Ioneer signs offtake agreement with Ford

The Ioneer share price is surging after the company signed an offtake agreement for lithium from its Rhyolite Ridge Project.

The project is located in Nevada, US. It's expected to start production in the second half of 2025.

The offtake agreement will see Ford's battery-making joint venture BlueOvalSK snapping up around 34% of the project's expected average annual lithium output for five years.

Another 34% of the project's output has already been promised to cathode supplier EcoPro.

Ioneer managing director Bernard Rowe commented on the news driving the company's share price today, saying:

Simply put, this strategic relationship means Nevada lithium for American cars, and it will lead to job creation across all levels of the electric vehicle supply chain. We look forward to continuing to work with Ford and its partners to help develop a secure and reliable end-to-end US EV industry.

Lisa Drake, Ford's vice president of EV industrialisation, said the agreement will support localised production of battery cells and help deliver EVs to millions of customers.

Ford has also signed offtake agreements with ASX lithium stocks Lake Resources NL (ASX: LKE) and Liontown Resources Limited (ASX: LTR). The former will deliver Ford 25,000 tonnes of lithium annually while the latter will provide 150,000 dry metric tonnes of spodumene concentrate.

Ioneer share price snapshot

Today's gains haven't been enough to boost the Ioneer share price back into the longer-term green.

It's currently 34% lower than it was at the start of 2022. Though, it is 35% higher than it was this time last year.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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