A key supplier of Toyota Motor Corp. has formed a partnership to mine lithium in Argentina, securing greater access to a metal critical to the production of future hybrids and electric cars. The partnership, announced late Tuesday, includes Toyota Tsusho Corp and Australian miner Orocobre Ltd.
They will develop a lithium mine in northwestern Argentina and the project is expected to cost about USD 100 million.
Under its agreement with Orocobre, Toyota Tsusho will pay USD 4.5 million for a feasibility study, expected to be completed in the third quarter 2010. Then it will take a 25% stake in the mining project. Orocobre will own the rest and operate the joint venture.
Toyota Tsusho, partly owned by Toyota Motor, based in Toyota City in central Japan, is securing a low-cost loan from the Japanese government to help fund 60% of the mining project.
Orocobre expects the mine, Salar de Olaroz, to begin production in 2012, with a capacity to put out 15,000 metric tons of lithium carbonate per year.
Lithium will play a bigger role in the auto industry, especially at Toyota, which has plans to sharply boost its hybrid and electric vehicle production this decade. The lightest metal on the periodic table, lithium is a key ingredient in lithium ion batteries currently found mostly in cell phones and laptops but expected to be more widely used in future automobile batteries.
Last week, the company announced plans to double its global hybrid sales to 1 million annually, with many likely to be powered with lithium ion batteries.
Most of the world's lithium is produced in South America, China and Australia. Chile and Argentina together account for about half the world's 27,400 metric tons of lithium production, though proven reserves have been found elsewhere.