Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has announced an exclusive agreement between its subsidiary Envirostream Australia and Infinitev Australia. This deal will enhance Lithium Australia’s lithium-ion battery supply and expand its recycling capabilities.

Lithium Australia’s Strategic Partnership

The agreement with Infinitev, a subsidiary of Amotiv Limited, focuses on lithium and nickel-based batteries. It is initially set for three years, allowing Envirostream Australia to recycle batteries owned by Infinitev. This partnership will also encourage Infinitev to promote Lithium Australia’s recycling services to its clients.

Commitment to a Circular Economy

Simon Linge, CEO of Lithium Australia, expressed enthusiasm about the collaboration, emphasizing the shared vision of building a circular economy for EV batteries. The focus for FY24 is to refine their recycling model, which is expected to result in cash operating profits by FY25. They aim to secure further agreements with original equipment manufacturers to enhance their battery volumes.

Financial Terms of the Agreement

Lithium Australia will receive a service fee for collecting batteries from Infinitev. Additionally, there is a revenue-sharing component from the sale of products derived from the recycling process. The agreement allows for a potential one-year extension, with standard termination clauses in place.

Positioning for Future Growth

The partnership with Infinitev provides a valuable source of end-of-life batteries, which Lithium Australia intends to use to attract additional clients. This aligns with their strategy of securing exclusive contracts with OEMs and strengthening their market presence.

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