Battery makers pushing for ten 10-year lithium contracts: Albemarle – by Peter Ker (Australian Financial Review – May 14, 2018)

A push to offer long warranties for batteries used in electric cars is one factor forcing lithium miners to change the way they sell their product, according to one of Australia’s biggest producers.

US company Albemarle, which owns 49 per cent of the lithium-rich Greenbushes spodumene mine in Western Australia, said battery manufacturers are increasingly demanding 10-year contracts in a bid to secure supply. The comments came as the New York listed company indicated first production on its $400 million lithium hydroxide plant in WA may come a year later than previously expected.

Addressing investors, Albemarle’s lithium president John Mitchell said a desire to offer 10-year warranties on lithium-ion batteries was driving some manufacturers to seek guaranteed sources of raw materials for similar periods.

“We had moved our customer base to three- to five-year agreements and now we see a strong pull from the leading providers of batteries and cathodes to go to as long as 10-year agreements and the rationale for that is really around security of supply,” he said.

“Not just security of supply of that type of molecule but security of supply of an [electric vehicle] grade that meets those specification for our battery that they can make a 10-year warranty on.”

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