The electric vehicles pioneer is worried about the effects of booming demand for EVs will have on the supply of minerals needed to manufacture rechargeable batteries.
Among the commitments in the deal, the investor may earn into the option for the project by constructing a $20 million pilot plant for the processing of lithium brine.
Global demand for strategic minerals like lithium, graphite and nickel will skyrocket by 965%, 383% and 108% respectively by 2050, according to the World Bank’s updated 2018 projections.
But with demand for lithium set to boom from above 300,000 tons a year to a million tons by 2025, mining companies need to grow fast and they prefer to do so in jurisdictions they know well.
Joint venture with Jiangxi Special Electric Motor, a major Chinese maker of engines for electric vehicles, will allow Alliance to participate in the downstream lithium products market without having to incur the capital costs or risk associated with the construction of a conversion facility.