Ford to buy lithium for electric car batteries from new Quebec mine

A Quebec company building a lithium mine and production plan has signed an 11 year deal to sell products to Ford for use in electric car batteries.

The deal announced by the automotive giant and Nemaska Lithium on Monday will see the American automaker become the Quebec company's first customer.

Ford will buy up to 13,000 tons a year of lithium hydroxide produced at Nemaska's factory in Bécancour, Que., about 150 kilometres northeast of Montreal, the two companies said in a joint news release.

"This agreement is a vote of confidence for the solidity of the project, of the quality of the product that will be produced, and, of course, a testament to the effort of the Nemaska teams," Steve Gartner, the chief financial officer of Nemaska Lithium, said in an interview Monday.

The company's Whabouchi mine, in the James Bay region of northern Quebec, is scheduled to begin producing lithium ore in 2025, which will then be processed at the Bécancour plant when it opens the following year.

"Lithium is a key component in high-quality and high-performing electric batteries," Gartner said. "We have a world class deposit in the James Bay region and we look to establish the first integrated mine to lithium hydroxide plant in Quebec to support the North American supply chain for electric vehicles."

Ford will also buy spodumene concentrate, a lithium ore, from Nemaska Lithium before the plant begins producing lithium hydroxide.

The automaker said in a release that Nemaska will provide a sustainable source of lithium that will help it scale production of electric vehicles and make those vehicles more accessible to customers.

Gartner said the plant will offer a more environmentally-friendly supply of lithium than many of its competitors.

"One of the strong advantages that our product will have is that we have access to hydroelectricity," he said. "On top of that, we use up to 12 times less water than certain processes and (emit) more than 70 per cent less greenhouse gas emissions than other similar processes around the world."

No dollar value was provided for the deal.

Nemaska is co-owned by Quebec's economic development agency Investissement Québec and Livent, a Philadelphia-based lithium company.

Last summer, the Quebec government and Livent announced they would each invest $80 million to fund the studies and preparatory work necessary to resume construction of the mine and to begin construction of the Bécancour plant.

A previous version of the company, under different ownership, entered creditor protection in 2019, losing Investissement Québec $71 million. Under the previous Liberal government, Quebec spent $130 million to support that company.

In 2020, when the province took over the project with a private-sector partner, it committed to spending up to $300 million on the relaunch of Nemaska. Of that funding, $175 million has already been announced.

This report by The Canadian Press was first published May 22, 2023.