Mercedes board member Markus Schäfer and Rock Tech Lithium CEO Markus Brügmann have closed a deal on lithium supplies.
(Photo: Rock Tech Lithium C) Gottfried Stoppel)
Toronto The German carmaker Mercedes-Benz and the German-Canadian company Rock Tech Lithium based in Vancouver signed an agreement on Thursday for the future supply of lithium hydroxide, the most important starting material for car batteries.
Rock Tech pledges to supply Mercedes battery suppliers with 10,000 tons of the material annually from 2026. According to the company, the annual delivery volume could be sufficient to supply around 150,000 electric vehicles with high-performance batteries.
Rock Tech’s lithium hydroxide plays a key role in securing the lithium supply for Mercedes battery production in Europe, said Markus Schäfer, Head of Development at Mercedes-Benz.
Mercedes plans to go fully electric by the end of the decade. From 2025, the manufacturer wants to offer all technical drives exclusively for battery electric vehicles.
Top jobs of the day
Find the best jobs now and
be notified by email.
The strategic partnership is planned for at least five years. Rock Tech Lithium estimates the sales volume of the off-take agreement at almost two billion Canadian dollars or 1.5 billion euros. According to its own statement, the company calculates on the basis of moderate market forecasts and assessments without naming concrete lithium prices. A ton of lithium hydroxide currently costs around $75,000 on the spot market in China.
The two companies had already announced their plans during the visit of Federal Chancellor Olaf Scholz and a German business delegation to Toronto in August.
Lithium: Rock Tech has not yet received building permits
Rock Tech is currently developing its first converter in the eastern German town of Guben, which will produce lithium hydroxide from the lithium ore spodumene. To date, there is no refinery of this type in Europe. Converters are located only in China and Australia.
The converter is scheduled to run from the end of 2024 and produce a total of around 24,000 tons of lithium hydroxide per year. According to Rock Tech, it has also reserved three more factory sites for lithium refineries in Europe.
Much of the spodumene for the converter is said to come from a mine in Ontario, Canada, that Rock Tech acquired in 2010. The realistic start of operation is 2025, parallel to the start-up of the converter.
However, building permits have not yet been issued for either the converter in East Germany or the mine in Canada. In addition, Rock Tech still has to find investors for the expensive construction projects. The development of the refinery alone will cost at least 470 million euros. The construction of the mine will probably also be in the three-digit million range. The company is constantly looking for partners and investors, said Rock-Tech CEO Markus Brügmann in an interview with the Handelsblatt. “We collect money like a start-up.”
Rock Tech is developing its first converter in the eastern German town of Guben, which is intended to extract lithium hydroxide from the lithium ore spodumene.
(Photo: Rock Tech Lithium)
Brügmann also explains why the lithium ore from Canada should be processed in Europe: “The market in North America for battery vehicles is around three years behind that in Europe. That’s also the reason why we don’t build a converter in Canada yet. It makes more sense to build the plant where the lithium hydroxide is processed directly into batteries.” Because the white, salty powder only has a certain lifespan and has to be transported to battery factories relatively quickly.
But the mine in Ontario alone is not enough: “We need additional material from other sources to fully utilize the converter,” says Brügmann. Rock Tech wants to find alternative sources in Australia and possibly also in Canada. “There are already advanced lithium mines here that we could buy the concentrate from.”
>>> Also read: VW wants to take a stake in raw material mines in Canada
The company is currently in contact with mine operators from Australia, such as Pilbara, Mineral Resources and Tianqi. To secure enough lithium, Rock Tech has also partnered with Swiss commodity traders Transamine and Thyssen-Krupp Materials.
Rock Tech wants to make a commitment to Mercedes-Benz to only source raw materials from mines that meet special humanitarian and ecological requirements. The company’s mine in Canada is to be certified according to the criteria of the “Initiative for Responsible Mining Assurances” (IRMA). IRMA is a community project of over 30 companies, non-profit organizations, unions and mining companies from all over the world.
More: Race for the best car battery: Porsche is building the “world’s smallest gigafactory”