Koch Industries Inc. investing in Compass Minerals to fund project tied to Ford Motor Co.

A division of Koch Industries Inc. will invest $252 million in Overland Park-based Compass Minerals through a stock purchase.

The bulk of the investment will go to a lithium project designed to help supply the electric vehicle market.

Koch Industries Inc. is backing a mineral company based in Kansas that helps tie its electric vehicle ambitions to one of the biggest names in the automotive industry.

Compass Minerals, headquartered in Overland Park, said Wednesday that Koch Minerals & Trading LLC will invest $252 million in the company via a stock purchase that will be used to help finance the opening phase of a lithium project in Utah. 

Lithium is a critical resource in the batteries that power electric vehicles — an industry that has garnered large Koch investment the past two years.

Compass (NYSE: CMP) in July announced a memorandum of understanding with Ford Motor Co. (NYSE: F) to explore the supply of battery-grade lithium from the development project now being backed by Koch. 

The company has a similar deal with South Korean battery maker LG Energy Solutions and has said those two companies represent the bulk of lithium supply expected from the initial phase of its lithium carbonate equivalent efforts on the Great Salt Lake.

Compass says $200 million of the Koch funds will support that project, expected to come online by 2025, with the remainder being used to pay down debt.

“We are pleased to welcome KM&T as our investment partner and look forward to leveraging their deep expertise and proven track record of building value,” Kevin Crutchfield, Compass president and CEO, said in a press release. “Securing funding to aggressively pursue phase one of our lithium growth opportunity has been an important focus for our management team. This strategic investment will help drive our lithium project forward, strengthen our balance sheet and enhance execution capabilities across our entire platform.”

Following the close of the 6.83-million-share buy, Koch will own 17% of the company’s common stock. 

“Koch Minerals & Trading is excited to partner with fellow Kansas-based company, Compass Minerals, a leading producer of salt, fertilizers and other essential products and materials,” said Jon Chisholm, vice president at the Koch division. “KM&T seeks partners like Compass Minerals to apply its bulk commodity capabilities to create greater value for customers, communities and shareholders. KM&T will also be working closely with Compass Minerals and other Koch companies to unlock a significant lithium resource at Compass Minerals’ Great Salt Lake facility and become one of the first major U.S.-based lithium producers.” 

The investment continues Koch’s broad efforts in the battery market, including a new engineering contract with Canada-based Standard Lithium announced last week. 

That company is also working on projects related to boosting the domestic supply of lithium in the U.S. to meet growing demand from the electric vehicle market. 

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