Rinehart’s Vulcan Fires Up Another Lithium Deal

Vulcan Energy Resources (ASX: VUL), the lithium up-and-comer backed by Gina Rinehart, revealed another off-take agreement ahead of the company’s annual meeting yesterday.

Vulcan said it has signed a binding lithium hydroxide off-take agreement to a minimum of 81,000 tonnes and a maximum of 99,000 tonnes of battery grade lithium hydroxide over a five-year agreement starting 2026 when it hopes to have started production.

Vulcan said in the statement (and told the shareholder meeting) that the lithium hydroxide will be used by the three Stellantis battery production facilities in Europe – in Termoli, Italy, and the Automotive Cells Company (ACC) joint venture plants in Kaiserslautern, Germany, and Douvrin, France.

Stallantis owns well known car brands like Peugeot, Citroen, Opel and Vauxhall with Chrysler, Dodge, Ram, Jeep, Abarth, Alfa Romeo, Lancia, and Maserati.

“The three plants combined will produce at least 120 gigawatt hours of cell capacity by 2030,” Vulcan said.

Vulcan is planning to produce zero-carbon lithium from hot underground springs in Germany’s Upper Rhine Valley. It also plans to use the thermal power – generated by the boiling water that it extracts the lithium from – to ensure its operations are carbon-neutral when production starts in 2024.

The company was the target of a recent report by short sellers J Capital, which questioned the firm’s technology and ability to produce lithium. The company has rejected the claims.

In October Samsung of South Korea announced that it had signed a preliminary deal to joint venture with Stellantis to produce lithium-ion batteries for electric vehicles in the US market.

Also in October, Stellantis and another South Korean battery maker, LG Energyl, announced a battery production deal to start producing lithium-ion battery cells from 2024.

By 2030, more than 70% of Stellantis’ European sales and more than 40% of its US sales will be low emission vehicles (LEVs).

Stellantis’ plans call for a total of five battery cell manufacturing plants in Europe, including Germany, and the United States, with a total capacity of 260 gigawatt hours (GWh).

Vulcan’s latest announcement follows a deal signed with Renault last week for between 16,000 and 32,000 tonnes of battery grade lithium chemicals over a six-year period.

Vulcan shares rose 1.5% to $10.41 yesterday.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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