GM to prepay Livent $198 million for guarantee of lithium

Nancy Profera; press release

August 3, 2022

In an effort to secure lithium for electric vehicle production, General Motors has agreed to prepay Livent $198 million for assurances of the critical mineral.

Reuters is reporting the guarantee of a six-year supply of lithium reflects the auto industry’s rising worry about a tightening market for the electric vehicle battery metal.

GM wants to ensure it has sufficient raw materials to meet its goal of producing 1 million electric vehicles annually in North America by 2025.

"GM is certainly thinking for the long term here," Paul Graves, Livent's chief executive, told investors on a recent conference call. "By making the advanced payment, they are clearly giving us the commitment that we were looking for."

Graves has long prodded automakers to work closer with lithium producers. In an interview with Reuters last fall, Graves warned that unless the auto industry signed long-term deals, "there may be periods where there is just insufficient lithium."

Livent produces lithium in Argentina and has processing facilities in the United States. The company expects to receive the GM prepayment later this year. Livent will start supplying GM in 2025 at a contractual price per tonne, though neither company disclosed volume.

Philadelphia-based Livent reported second-quarter net income of $60 million, or 31 cents per share, compared with $6.5 million, or 4 cents per share, a year ago. According to the Livent website, the company’s roots go back to the 1940s, when the Lithium Corp. of America worked with the U.S. government to develop useful applications for lithium.

The U.S. Geological Survey 2021 annual industrial minerals review reports that world lithium consumption was about 93 kt of lithium contained in minerals and compounds, a 33 percent increase from 2020.

The USGS annual outlook is published by Mining Engineering magazine and this year reports, “Lithium-ion batteries have rapidly gained in importance because of their extensive use in portable electronic devices, tools, scooters and bicycles. Lithium supply security has become a top priority for technology companies in Asia, Europe and the United States.” Read the July 2022 issue and the critical minerals review here.


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