Ioneer Ltd (ASX:INR, OTC:GSCCF) has formed a commercial offtake agreement partnership with Dragonfly Energy Holdings Corp, a leading player in energy storage, to boost investment in the production and manufacturing of locally sourced lithium in Nevada and strengthen US battery supply chains.
This partnership represents a significant step towards achieving Nevada governor Joe Lombardo's priority of closing the lithium loop in the state, as detailed in his recent State of the State address and five-year strategic plan.
Governor Lombardo said: “This agreement between Dragonfly Energy and Ioneer, and hopefully more like it in the future, is vital to our economy as we work to develop this new industry, secure Nevada’s energy independence and close the lithium loop,
“In the future, we hope to see more Nevada companies creating innovative partnerships like this one, which will help strengthen our economy and demonstrate how Nevada is the lithium capital of North America.”
The deal will help to produce, use and recycle lithium, which is crucial to building sustainable battery supply chains.
What’s more, the agreement advances Nevada’s production and manufacturing of critical minerals and accelerates the domestic electrification pipeline for EV battery components.
lithium from Rhyolite Ridge
The locally extracted and refined lithium will be sourced from Rhyolite Ridge, which is one of the most sophisticated undeveloped lithium projects in the US.
Rhyolite Ridge is expected to quadruple the current US lithium output upon completion of federal permitting and construction.
The partnership will also bring Dragonfly Energy closer to its mission of establishing a vertically integrated lithium battery cycle, from mining to cell and pack production to recycling.
Ioneer managing director and CEO Bernard Rowe said: “As the world’s demand for lithium in electric vehicle and energy storage increases, the need to secure a reliable, sustainable and domestic source of lithium is critical.
“Ioneer is pleased to partner with Dragonfly and deliver these critical materials from Rhyolite Ridge.
Agreement summary
The agreement will pave the way for continued investment in the state and provide Dragonfly with a domestic supply of lithium carbonate, a critical component in lithium iron phosphate battery cells.
The terms of the agreement include the supply of lithium carbonate for a period of three years, beginning when Ioneer notifies Dragonfly that the project has been fully completed and commissioned in accordance with the engineering, procurement and construction contract.
The deal is based on an agreed market-based price formula, with the currency being US dollars per metric ton. The volume will be determined by the surplus amount after meeting previously announced offtake commitments.
Dragonfly CEO Denis Phares said: “Deploying our innovative dry powder coating cell manufacturing process is exciting.
“But ultimately, cell production is only made possible by access to lithium.
“This agreement gives us the opportunity to bring our entire manufacturing process not only to the US but to Nevada, from mining to manufacturing to recycling.”