Lake Resources\u2019 growth has been rapid under Stu\u2019s leadership. From a micro-cap company in January 2021, it was officially admitted to the ranks of Australia\u2019s top 200 companies in June with a market capitalisation of around A$3bn (USD 2bn).<\/p>\n
The announcement by S&P Dow Jones that Lake Resources would join the S&P\/ASX200 index on 20 June was a proud moment for Crow and his company. However, this is only the start of the journey, Crow says: \u201cJoining the top 200 index recognises our enormous growth in market value and our status as one of Australia\u2019s leading companies in the lithium sector.<\/p>\n
\u201cHowever, we have no plans to slow down and are aiming even higher.\u201d<\/p>\n
Lake Resources\u2019 promotion to the benchmark index is expected to see more institutional buying of the company from major investors, such as superannuation funds and investment banks.<\/p>\n
While in 2022 global stock markets have been rocked by rising inflation, interest rates, and war in Ukraine, Lake Resources continues to enhance its engagement with international capital markets. On 17 June, the company announced it had appointed two leading project finance institutions, Citi and J.P. Morgan, as joint coordinators for its Kachi project. Lake Resources said the appointment followed a tender panel that indicated bank appetite for the project was \u201cin excess of five times the required amount, reflecting the strong interest by international banks and support from export credit agencies.\u201d<\/p>\n
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Citi and J.P. Morgan have been tasked with assembling the debt financing package for Kachi, with the support of GKB Ventures and SD Capital Advisory.<\/p>\n
Importantly, Lake Resources has also gained support from Britain\u2019s official export credit agency, UK Export Finance (UKEF), to fund around 70% of Kachi\u2019s requirements, subject to UKEF approval and standard project finance conditions.<\/p>\n
Canada\u2019s export credit agency, Export Development of Canada, is expected to participate alongside UKEF, further strengthening the project\u2019s finances and providing access to low-cost lending.<\/p>\n
\u201cWe are pleased to partner with Citi and J.P. Morgan, who support Lake\u2019s commitment to sustainable extraction and minimising our environmental footprint,\u201d Crow said.<\/p>\n
\u201cBacked by the strength and status of the export credit agencies of Britain and Canada, Lake has extremely strong financial backing for our flagship project, providing confidence to our investors and project partners.\u201d<\/p>\n
Ford, Hanwa MOUs<\/h3>\nLake Resources\u2019 production targets have received backing from both the US and Asia, following this year\u2019s signing of two significant agreements.<\/p>\n
In March 2022, Lake Resources announced a non-binding memorandum of understanding (MOU) with the Japanese trading house, Hanwa Co. Under the agreement, Lake Resources could provide up to 25,000 TPA of lithium carbonate over 10 years, with a minimum of 15,000 TPA LCE, priced at average quarterly benchmark prices.<\/p>\n
The MOU also allows Hanwa to provide financial support, such as equity investment, a potential prepayment on offtake, and trade finance facilities to secure a long-term agreement with Lake Resources.<\/p>\n
\u201cThe market for lithium-ion batteries for EVs is unstoppably expanding, and we are handling raw materials for those sophisticated products and increasing our involvement in all aspects of the supply chain,\u201d Hanwa\u2019s J Tomono said.<\/p>\n
\u201cWe have been seeking the right products at scale, with the right partner, to advance the development of the latest technology in batteries and its cathodes.\u201d<\/p>\n
Crow said the MOU and finalisation of a binding offtake agreement with Hanwa would \u201callow Lake to stay an independent supplier into global lithium supply chains and ensure the security of supply to the market and potential customers.<\/p>\n
\u201cIncreasing customer and consumer scrutiny around the environmental credentials of lithium production, and concerns about the security of supply, has given us the confidence to enter into this partnership with Hanwa.\u2019\u201d<\/p>\n
Less than a month after the Hanwa announcement, Lake Resources followed up with another non-binding MOU, this time with the leading global automaker, Ford Motor Company.<\/p>\n
On 11 April, Lake Resources announced plans for offtake of around 25,000 TPA from the Kachi project with Ford, supporting Ford\u2019s EV drive and the development of a \u2018clean lithium supply chain.\u2019<\/p>\n
\u201cAs we have shared, Ford is sourcing deeper into the battery supply chain,\u201d said Lisa Drake, Ford\u2019s Vice President of EV Industrialisation.<\/p>\n
\u201cThis is one of several agreements we are exploring to help us secure raw materials to support our aggressive EV acceleration,\u201d she said.<\/p>\n
\u201cBoth 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\u2019s other projects to ensure high-quality lithium products are available to Ford,\u201d Lake Resources said.<\/p>\n
The Ford tie-up followed the US automaker\u2019s April launch of an electric F-150 Lighting pickup, a move it described as \u2018the Model T moment for the 21st century.\u2019<\/p>\n
The first mainstream, full-size electric pickup launched in the US market, the new vehicle has a starting price of below USD 40,000 and an estimated range of up to 320 miles.<\/p>\n
Built at Ford\u2019s historic Rouge Complex in Michigan, the vehicle is part of the Ford F-Series, America\u2019s best-selling truck for 45 years straight, second only to the iPhone in revenue among US consumer products.<\/p>\n
Ford said it had seen \u2018unprecedented\u2019 demand for the new F-150 Lightning, with some 200,000 orders already received. It plans to ramp up production to 150,000 vehicles per annum from 2023, following a USD 950m investment in its Rouge Electric Vehicle Center.<\/p>\n
\u201cAmerica\u2019s real transition to electric vehicles starts now,\u201d Ford President and CEO Jim Farley said in a 26 April statement.<\/p>\n
LMC Automotive projects the US electric pickup truck market will increase from around 25,000 vehicles in 2022 to more than one million by the end of the decade. The current five electric pickup models are predicted to rise to more than 20 by 2030.<\/p>\n
Ford aims to deliver more than two million EVs annually by 2026, equal to one-third of its global volume, targeting 50% by 2030. The increase to two million EVs would make Ford second only to Tesla, although General Motors aims to surpass Tesla in domestic EV sales by 2025.<\/p>\n
Ford is also following its founding principle of self-sufficiency in reviving vertical integration. During World War I, Ford\u2019s River Rouge complex produced iron and steel for its vehicle manufacturing needs, supplied by its own iron ore and coking coal mines in Michigan and Kentucky.<\/p>\n
Now, amid soaring prices and declining supply of key battery metals such as lithium, Ford plans to take control of its supply chains \u201call the way back to the mines,\u201d Farley said.<\/p>\n
Meanwhile, Lake Resources continues to advance its flagship Kachi project. On 14 July, an operating team from Lilac Solutions arrived on site, with demonstration plant modules to be delivered by 20 July, ahead of commissioning.<\/p>\n
Industry analysts, Benchmark Mineral Intelligence, have flagged a continued structural deficit in the lithium market through 2025.<\/p>\n
With the EV revolution entering the mainstream, lithium resources such as Lake\u2019s are in strong demand, particularly those capable of meeting the high-quality battery grades and exacting sustainability requirements of the European Union and US automakers.<\/p>\n
Please note, this article will also appear in the eleventh edition of our\u00a0<\/i><\/strong>quarterly publication<\/b><\/em><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"