BMW and Albermale ink lithium supply deal

Lithium supplier looking to pivot away from spot sales

BMW and Albermale ink lithium supply deal
BMW will source Albermarle lithium from 2025

Germany's BMW Group has signed a deal with Australian lithium producer Albemarle for the supply of battery-grade lithium from 2025.

The two companies will also partner on lithium-ion battery technology development. 

“We welcome the opportunity to work alongside the BMW Group to further enable the clean energy transition,” says Albemarle Energy Storage President Eric Norris.

The size and duration of the contract was undisclosed, although it was described as ‘long-term’ and one of the supplier's 'largest ever' deals.

Last year Albermale signed a deal to supply more than 100,000 metric tons of battery-grade lithium hydroxide to Detroit OEM Ford for its EV batteries. The five-year supply agreement starts in 2026 and continues through 2030.

The lithium supplier has been seeking to pivot away from spot sales to longer term contracts in order to avoid short term volatility in the lithium market. 

Lithium carbonate equivalent (LCE) spot prices have fallen from a high of $80,000/t to current levels of $13,000/t over the past year, according to thinktank the Oxford Institute for Energy Studies.

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As well as signing new long-term contracts, Albermale has been re-negotiating its existing fixed-price contracts, resulting in a current portfolio that is split roughly 20-25pc spot and short-term purchase orders, and 75-80pc long-term variable contracts.

The firm has also been seeking new partnerships with a diverse range of firms across the value chain including cathode and battery manufacturers, in addition to OEM customers.

Albemarle recently downgraded its 2030 forecast for global lithium demand by 10pc, saying it will only look to start investing in new assets if prices improve, evaluating cost efficiency on a ‘project by project’ basis.

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