© Reuters. FILE PHOTO: The Ford logo is seen at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2019. REUTERS/Brendan McDermid/File Photo

(Reuters) -Liontown Resources Ltd signed a lithium supply agreement with Ford Motor (NYSE:) Co, the Australian miner’s latest after similar deals earlier this year with Tesla (NASDAQ:) and electric vehicle (EV) battery maker LG Energy.

Liontown said on Wednesday it will supply Ford with 150,000 dry metric tonnes (DMT) of lithium spodumene concentrate each year for five years from its flagship Kathleen Valley project in Western Australia. The concentrate is a source of lithium essential for making EVs.

Shares in Liontown, a small miner chaired by Australian entrepreneur Tim Goyder, surged 17% in morning trading, but pared gains to trade up 5.6% by noon (0200 GMT), giving it a market capitalisation of about A$2.5 billion.

A global push towards decarbonisation and achieving net zero carbon emissions has bolstered the demand for EVs, propelling the prices of battery metals like lithium to record levels.

Ford, which is betting aggressively on EVs, said in March it would boost spending on EVs by two-thirds to $50 billion through 2026 and run its EV unit separately from its legacy combustion engine business, a move aimed at competing better against Tesla.

The U.S. car maker has a joint venture with EV battery maker SK On, a unit of South Korea’s SK Innovation. The venture, called BlueOvalSK, is slated to have an annual battery production capacity of 129 gigawatt-hours (GWh) in the United States.

Liontown said it has also secured a debt facility of A$300 million ($207.21 million) from a Ford unit to further develop the Kathleen Valley project.

The Australian miner is expected to start supplying spodumene in 2024, starting with 75,000 DMT in the first year of the deal, and rising to 150,000 DMT in the third year.

($1 = 1.4478 Australian dollars)

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