Orocobre and Toyota Reach Deal for Argentine Lithium MineOrocobre and Toyota Reach Deal for Argentine Lithium Mine

Critics of the development and use of lithium-ion (“li-ion”) batteries have long cited their concerns over the (un)availability of lithium, and with moderate success. They state that politically unstable, remote Bolivia owns the world’s largest reserve of lithium, which is certainly true. But while detractors and nay-sayers have been busy wringing their hands, Toyota has been busy finding another, more reliable, source.
 
Today, Toyota Tsusho Corporation, the world’s sixth-largest trading company, announced a joint venture with Australian mine operator Orocobre Limited to develop a mine in the Puna Region of Argentina. The lithium won’t just be used in the popular Prius, either — Toyota has agreed to supply li-ion batteries for automotive use by Panasonic and Sanyo. Under the terms of the agreement, Toyota Tsusho will provide $4.5 million to complete a feasibility study and other pre-development activities at the Salar de Olaroz Project. Toyota Tsusho has also agreed to secure funding for at least60% of the Project’s development costs through low-interest loans from the Japanese government. These special loans have been made available to Japanese companies to aid them in securing the mineral resources they need to remain competitive.
 
The pre-development activities, including the feasibility study, are slated to be completed by the third quarter of 2010. Once the Project has been constructed, Orocobre will own 75% of it, and will operate the venture. A press statement from Orocobre quotes their Managing Director, Richard Seville, as saying that Toyota Tsusho is an ideal partner, giving Orocobre the funding and industry expertise they will need to succeed. The benefit to Toyota is clear. In the release, Seville said, “As environmentally-friendly electric car demand continues to grow, Toyota Motor Corporation will have the opportunity to become a cornerstone off-take customer.”
 
In short, the benefits of the joint venture do appear to work both ways — Orocobre secures the funding they need to get the Project off the ground and viable, while Toyota Tsusho (who supplies their “big brother” company, Toyota Motor) gains access to a reliable source of high-quality battery-grade materials… from a source other than Bolivia.
 
Source: Orocobre press release

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