Lake Resources NL (LKE.AX) in a non-binding memorandum of understanding with Hanwa Co., Ltd. to negotiate a levy up to 25,000 tpa and a long-term partnership
Sydney, Australia, April 2, 2022 – (ABN Newswire) – Lake Resources NL (ASX:LKE) (OTCMKTS:LLKKF), announces that it has signed a non-binding Memorandum of Understanding with major Japanese partner, Hanwa Co., Ltd. (“Hanwa”), which has an “A-” credit rating, to secure up to 25,000 tonnes per annum (tpa) of lithium carbonate offtake over 10 years (with an extension for an additional 10 years), with a minimum of 15,000 tpy of LCE, sourced from the Kachi project, to be priced at quarterly average reference market prices.
– Proposal to take up to 25,000 tonnes per annum (tpa) of lithium carbonate (+/- hydroxide) at market prices from the Kachi project under a non-binding agreement with the main Japanese partner.
– Hanwa intends to cooperate with Lake not only in marketing and distribution in the Asian market, but also in coordinating a strategic and sustainable supply chain with its potential customers in the battery industry.
– Hanwa is considering a significant capital investment to build a strong and lasting partnership with Lake Resources as well as other potential financial support, such as prepayment on the levy, commercial finance facilities and project development grants.
– Intention to establish a strategic collaboration between Hanwa and Lake to develop a clean lithium supply chain to meet the environmental requirements of electric vehicle, stationary battery and cathode/precursor manufacturers and their end customers.
– A positive outcome to the negotiations will guarantee an offtake partner rated “A-” and further de-risk the project for financiers and investors.
The MoU also allows Hanwa to consider providing financial support mechanisms such as significant equity investment, possible prepayment on levy and trade finance facilities in order to enter into a long-term agreement and to build a lasting partnership with Lake.
“In April 2021, Hanwa formed the Battery Team to create multi-faceted business opportunities in the Electric Vehicle (EV) Battery and Accumulator industries,” said MJ Tomono, General Manager and Supervisor of the Battery Team of Hanwa.
“The market for lithium-ion batteries for electric vehicles is growing, and we are handling raw materials for these sophisticated products and increasing our involvement in all aspects of the supply chain.
“We are looking for the right products, at scale, with the right partner, to advance the development of the latest battery technology and its cathodes,” said MJ Tomono.
Hanwa and Lake have agreed, under the non-binding Memorandum of Understanding, to negotiate in good faith and use all reasonable efforts to finalize a comprehensive and legally binding agreement, together with other blockchain participants. battery supply, including electric vehicle, battery and cathode/precursor manufacturers. develop a “clean lithium” supply chain to meet the environmental requirements of electric vehicle manufacturers and their customers.
Hanwa wants to coordinate a strategic partnership between Hanwa and Lake, but also companies down the battery supply chain, to jointly develop a unique and efficient supply chain “for mutual growth and sustainability.”
“Hanwa has already started discussing and considering proactive cooperation with potential partners,” said MJ Tomono. Lake will provide samples and technical support to Hanwa and its potential battery supply chain partners/customers.
“The MoU reflects Hanwa’s intention to move quickly toward finalizing the terms of a strong, long-term and binding final operating agreement, as well as enabling financial support for Lake said Lake General Manager Steve Promnitz.
“Lake and Hanwa both see this MOU as the path to finalizing a binding long-term agreement with the ability to ramp up production and participate in Lake’s other projects to ensure that lithium products from high quality with leading ESG benefits are available for Hanwa’s electric vehicle and battery. clients.”
Lake Chairman Mr. Stu Crow said finalizing a binding long-term agreement with Hanwa will strengthen Lake’s financial position as it heads towards a final investment decision later this year. .
“This memorandum of understanding and the finalization of a binding purchase agreement with Hanwa will enable Lake to remain an independent supplier in global lithium supply chains and ensure security of market supply and potential customers.”
Mr Crow said project finance was increasingly tied to ESG credentials and that investors, debt providers and buyers and their customers demanded that new lithium projects meet strict ESG standards.
“Close scrutiny from customers and consumers regarding the environmental credentials of lithium production and concerns about security of supply has given us the confidence to enter into this partnership with Hanwa,” said Crow.
He said the MoU with Hanwa and with the export credit agencies of the UK and Canada having already indicated their willingness to project debt financing of around 70% of the capital requirements of the project Kachi, supports Lake’s TARGET 100 program, which aims to produce 100,000 tons of high-purity lithium chemical annually in the market by 2030.
The MoU and finalization of a binding long-term agreement with Hanwa will provide access to project-scale batteries to complete a solar farm power source at the Kachi project with commercial financing at favorable rates for installation.
Hanwa agreed to this release. Lake will update the market on progress on the legally binding framework and other agreements as soon as it is able to do so.
About Lake Resources NL:
Lake Resources NL (ASX: LKE) (OTCMKTS: LLKKF) is a clean lithium developer using clean, direct mining technology to develop sustainable high-purity lithium from its flagship Kachi project, as well as three other lithium brine projects in Argentina. The projects are located in a prime location within the Lithium Triangle, where 40% of the world’s lithium is produced at the lowest cost.
This method will enable Lake Resources to be an efficient, responsible, environmentally friendly and competitive supplier of high purity lithium that is easily scalable and in demand by EV and Tier 1 battery manufacturers.
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