Toyota Tsusho -- a subsidiary of Toyota Motor Company -- reached a deal with Australian mineral resource company Orcobre, allowing it to purchase lithium from a new mining project in Argentina. As a result, Toyota has yet another source for a key component for lithium-ion batteries, which power many hybrid and electric vehicles.
"As environmentally friendly electric car demand continues to grow, Toyota Motor will have the opportunity to become a cornerstone offtake customer," Orocobre said in a statement.
Under the terms of the deal, which are subject to finalization, Toyota Tsusho will take a 25% equity stake in the new lithium mining project, while Orocobre will hold the remaining 75% and run the venture. As a supplier to Toyota Motor Corporation, Toyota Tsusho is expected to funnel the lithium supply to battery manufacture for future Toyota hybrids and electric cars.
Toyota Motor currently uses nickel-metal hydride batteries in its Prius hybrid, but is switching over to more-powerful lithium-ion batteries. Access to sufficient supplies of the rare metal lithium has long been cited by Toyota as a reason to stick with nickel-metal hydride batteries while competitors moved on to lithium-based batteries. The company is hoping to sell 1 million hybrid vehicles per year worldwide by 2011.
Orocobre spokesman Paul Ryan, speaking with Reuters, said that the Salar de Olaroz project is expected to cost between $80 and $100 million, but an exact price won’t be known until a feasibility study is completed in September. While Argentina’s exact lithium reserves aren’t known yet, neighboring Bolivia holds roughly half of the world’s lithium reserves and does not mine the metal yet.