Lake Resources Limited (ASX:LKE) Managing Director Steve Promnitz discusses offtake MOUs with Hanwa and Ford.
Tim McGowen: We’re talking today with Steve Promnitz, who is the CEO of Lake Resources (ASX:LKE). Steve, nice to see you face to face for a change. Steve, in the space of a week — you’ve had a big week — you’ve announced two significant MOUs, one with Hanwa, a Japanese commodity trading house, and now with Ford, a company that everyone all knows, and a company that has a significant commitment to building a non-China EV supply chain. Can you talk to the significance of this announcement?
Stephen Promnitz: Thank you so much. It is a key announcement. And the importance is not just for Lake shareholders, or for Ford, but also the fact that we haven’t seen many major EV makers actually sign an offtake agreement with the underlying upstream lithium producer. And so it’s a key milestone, and it actually shows where the whole industry’s going. Of course, it is an non-binding agreement, so we are in discussions, but it’s a very clear sign of where things are trending.
Tim McGowen: Now, Steve, looking around the world, there are very few lithium projects with such impressive ESG credentials. Is that something that attracted Ford?
Stephen Promnitz: The ESG credentials of the product we’re going to be producing has attracted the export credit agencies, now it’s attracted Japan Inc, on the back of Hanwa, and now Ford. So, all of these players want to see significant offtake, both from this project and others, but they want to be able to do it as the best they possibly can, and we’re promising a very high-quality product, consistent, that can scale up, with significant ESG benefits, and yes, that is a key differentiator.
Tim McGowen: Now, Steve, on face value your 50,000 tonne a year Kachi lithium project is effectively sold out, and you’ve spoken about, previously, a 100,000 tonne target in terms of other projects. So, with your strategic collaboration, if you like, now with Ford, is that something that’s on the cards?
Stephen Promnitz: Absolutely. One of the key reasons, apart from the scale of the product, and its ESG benefits, is that Hanwa, Ford, can work with us on developing the next project, and possibly the one after that. We’ve got a large portfolio of projects, we’re using DLE to come to market more quickly with a high-quality product, and that’s absolutely one of the key benefits that comes to both parties. But we’re still in discussions. It is non-binding.
Tim McGowen: Now, Steve, the Ford announcement looks very similar to the Hanwa announcement just made just recently. However, there’s no mention of pricing, there’s no pricing mechanism in the agreement, or potential investment by Ford. Are you able to give us a little bit more colour on this?
Stephen Promnitz: Well, the short answer to that is no. The announcements are similar because we’re working on similar terms, but we’re in discussions at the moment, so basically I can’t add anything more than what’s in that announcement at this stage. But there will be more news to come.
Tim McGowen: And, Steve, finally, what needs to be achieved in relation to securing a financing package from both the UK and Canadian export agencies that you’ve been talking with?
Stephen Promnitz: Well, as we’ve mentioned before, our definitive feasibility study completion, our environmental social impact assessment completion, now we’ve got offtake discussions well underway. They’re the three key things, and we’ll be able to update the market on how that whole financing package is progressing. But suffice to say, all of these things are trending in the right direction. If I could leave your listeners with one final comment, the whole industry is short lithium. That’s the only reason that major auto makers, major battery makers, are out there looking for this product. And so we all have to step up to the plate. We’re just fortunate that we’ve got both projects available, we’ve got a technology that can deliver a high-quality product with ESG benefits, and we’ve got a financing package so we can bring a number of these to market. So, it’s pretty exciting times. Now, they are non-binding agreements, but we’re well on path. Watch this space. There’s going to be a lot more news to come.
Tim McGowen: Steve Promnitz, thanks for your time.
Stephen Promnitz: Thank you.