Emerging lithium producer Galaxy Resources has signed an offtake agreement with Mitsubishi for a significant proportion of its battery grade lithium carbonate production, starting this year. The agreement involves long term offtake sales and distribution of Galaxy’s product to the Japanese market. This follows closely on Toyota’s agreement with Australian-based Orocobre to a 25% stake in the Salar de Olaroz project in Argentina with Orocobre operating the venture and holding the remaining 75%.
Mitsubishi Corp (MC) is Japan’s largest general trading company with more than 200 bases of operations in some 80 countries worldwide. Mitsubishi, Mitsubishi Motors and battery manufacturer GS Yuasa formed a JV Company in December 2007 called Lithium Energy Japan to manufacture and supply large capacity and high performance lithium ion batteries to the automobile sector. In July 2009, Mitsubishi Motors launched its iMiev full electric car in Japan to both fleet and corporate customers. It will commence sales to individual customers in April 2010. The iMiev was awarded the 2009-10 Car of the Year, Japan’s “most advanced technology” Special Achievement Award.
Mitsubishi Heavy Industries (MHI), another Group company, will build a commercial production verification plant in Nagasaki Prefecture and launch its operation by autumn 2010, moving the company towards full-scale entry into the lithium-ion secondary battery market. The new plant will have a production capacity of 66 MWh/y of batteries, which is equivalent to 400,000 medium-size cells. The batteries were developed in a 20-year joint research and development project with Kyushu Electric Power Co. In October 2009, MHI became the world’s first hybrid forklift producer using lithium-ion batteries to save 40% of the fuel cost.
Galaxy Resources Managing Director Iggy Tan said the agreement with Mitsubishi marked an important milestone for Galaxy’s lithium project with both companies’ vision and business philosophy closely aligned. “We are delighted to partner with one of Japan’s largest companies and a very reputable name worldwide,” Tan said. “By 2010, Galaxy’s Mt Cattlin mine will be the world’s second largest hard rock producer of spodumene, and through the development of its value adding lithium carbonate plant in China, the Company will be the largest and lowest cost battery grade lithium carbonate producer in Asia.”
Galaxy is currently in discussions and is close to finalising similar off take agreements with other major groups and high end users of battery grade lithium carbonate in China and other Asia Pacific regions.
