Stellantis has invested €50 million in Vulcan Energy Resources. As such, it becomes the second-largest shareholder of the German-Australian lithium producer with an 8% stake. Vulcan and Stellantis have also extended their binding offtake agreement for lithium hydroxide by five to ten years, up to 2035.
It has been known that Stellantis is betting on lithium from geothermal production. In 2021, the group announced that it had concluded two memoranda of understanding. This was followed in November 2021 by a binding order for up to 99 000 tons of lithium hydroxide over five years from Vulcan, subject to commercial production at Vulcan and full product qualification.
Whether Stellantis now considers these reservations to have been overcome, even though commercial production in the Upper Rhine Valley is not yet underway, is not clear from either Vulcan’s brief ad hoc announcement or Stellantis’ press release.
Sustainable value chain
Stellantis CEO Carlos Tavares’ rationale for the investment sounds much the same as when he signed the offtake agreement. “Making this highly strategic investment in a leading lithium company will help us create a resilient and sustainable value chain for our European electric vehicle battery production,” Tavares says in his company’s press release.
According to Stellantis, the capital will go toward the “drilling project to expand Vulcan’s production capacity at its production site in the Upper Rhine Valley”. It’s one of the leading European projects to mine lithium, to be far less pollutant than actual production in Australia and South America. In addition, Vulcan foresees producing lithium hydroxide without using fossil fuels and is totally carbon neutral.
“Stellantis’ significant investment in Vulcan and the Zero Carbon Lithium Project represents a strong statement by one of the world’s largest automakers regarding sustainable and strategic sourcing of battery materials,” said Vulcan CEO Francis Wedin, who is also the founder and largest shareholder before Stellantis.
“We are fully aligned with Stellantis’ decarbonization and electrification goals, representing some of the industry’s most ambitious. It is encouraging to see a leading automaker investing in local, low-carbon lithium production for electric vehicles,” Wedin added.
The binding offtake agreement for the lithium hydroxide has also been extended by five years to 2035. However, new delivery quantities are not mentioned in the notices. The previous purchase volume was 81 000 to 99 000 tons. It is not clear yet if this amount will also double, like the term of the agreement.
Same in the US
A few weeks ago, Stellantis N.V. and Controlled Thermal Resources Ltd. (CTR) announced a binding offtake agreement for CTR to supply battery-grade lithium hydroxide for use in Stellantis’ North American electrified vehicle production too.
CTR’s Hell’s Kitchen Project in California’s Imperial County will recover lithium from geothermal brines utilizing renewable energy and steam to produce battery-grade lithium products in an integrated, closed-loop process, eliminating the need for evaporation brine ponds, open-pit mines, and fossil-fueled processing.
CTR will supply Stellantis with up to 25 000 tons per year of lithium hydroxide over the 10-year term of the agreement.