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The BMW Group has signed a contract with Ganfeng Lithium to receive its supply for the battery-making ingredient from Australian mines.

This entails a projected order volume totalling €540 million ($872.8 million), representing 100 per cent of BMW’s lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries, according to BMW AG’s board of management member Andreas Wendt.

The contract runs for a term of five years.

Lithium, alongside cobalt, is one of the key raw materials for electromobility, according to Wendt.

“With the signing of this contract, we are securing our lithium needs for battery cells,” he said.

“We aim to have 25 electrified models in our line-up by 2023 – and more than half will be fully electric. Our need for raw materials will continue to grow accordingly.

“By 2025, for lithium alone, we expect to need about seven times the amount we do today.”

BMW plans to double its electric vehicle sales between 2019 and 2021.

The German group stated sustainability was at the core of the expansion of electromobility, and Ganfeng extracted lithium by mining hard-rock deposits in Australia under the strictest sustainability standards.

Ganfeng has offtake agreements with Pilbara Minerals and Altura Mining in place.

The Chinese company also acquired some of Neometals’ assets at the Mt Marion lithium project in Western Australia last year.

“We are fully aware of our responsibilities: lithium and other raw materials must be extracted and processed under ethically responsible conditions,” Wendt said.

BMW will also source cobalt directly from mines in Australia and Morocco to secure a supply at least up to 2025.