Toyota Tsusho Corp., a subsidiary of the Toyota Group, has acquired a strategic stake in the Australian mining company Orocobre Ltd. The deal, which was just announced on 16 January, is worth nearly AUD 300 million and ensures the Toyota Group has a stable supply of a key material for batteries used in its electric vehicles (EV).

The Financial Times reported on 16 January that Toyota Tsusho bought a 15% stake in Orocobre for AUD 282 million. Orocobre will use the cash to expand the production capacity of its lithium mining project in Argentina. The Argentinian mine produced 17,500 metric tons of lithium carbonate ores in 2017. Orocobre aims to raise the production capacity of the mine by 143% to 42,500 metric tons per year.

Toyota Tsusho via a press release stated that the strategic partnership with Orocobre will help the Toyota Group secure a source of lithium for the long term while the global demand for the metal is on the rise. This deal reflects the recent trend of EV makers buying shares in lithium mines. Chinese EV companies BYD Co. Ltd. and Great Wall Motors Co. Ltd. have made similar investments. The strategy of controlling upstream material sources is considered as the best guarantee for minimal disruption to the EV battery supply chain.

In addition, Toyota Tsusho and Orocobre are planning to build a lithium hydroxide plant in Japan’s Fukushima Prefecture. The facility is expected to have a production capacity of 10,000 metric tons per year.

 (Credit of the photo at the top of the article goes to Orocobre Ltd.)