- European Lithium (EUR) signs its first non-binding offtake agreement to supply battery-grade lithium hydroxide from its Wolfsberg project in Austria
- The company is in negotiations with carmaker BMW for the purchase of 100 per cent of the lithium hydroxide produced by European Lithium
- Under the potential deal, BMW will pay an upfront US$15 million (A$21.6 million) to be set off against the lithium hydroxide delivered, and EUR will use the funds to develop its Wolfsberg lithium project in Austria
- If all goes to plan, European Lithium hopes to begin lithium hydroxide production at Wolfsberg in the first quarter of 2025
- European Lithium shares are up 12.2 per cent to trade at 9.2 cents at 11:37 am AEST
European Lithium (EUR) has partnered with luxury vehicle manufacturer BMW AG to potentially supply lithium hydroxide to the European battery market.
The companies have signed a memorandum of understanding to negotiate suitable commercial terms for BMW to have the first right to purchase all of the lithium hydroxide that European Lithium produces from its Wolfsberg project in Austria.
If both parties come to a binding agreement, BMW will pay US$15 million (A$21.6 million) upfront, which will be repaid through equal set-offs against the lithium hydroxide delivered.
European Lithium will use the upfront payment to develop the Wolfsberg project, including getting the construction phase underway.
“Securing our first offtake with BMW AG is another key milestone for the company,” European Lithium Chairman Tony Sage said.
“Partnering with BMW AG is an ideal fit for EUR.”
The company said it would now focus on finalising the development of the Wolfsberg project and building a portfolio of prospective battery metals assets in Europe.
European Lithium and BMW are still in the negotiation stage of the deal and have not yet entered into any binding agreements.
Based on a pre-feasibility study completed in 2018, the Wolfsberg Project has a mineral resource estimate of 10.98 million tonnes at one per cent lithium oxide and is set to produce 10,129 tonnes of lithium hydroxide per annum over a mine life of 10 years.
European Lithium is undertaking a definitive feasibility study for the project that it hopes to complete by the end of the year.
If all goes to plan, the company said it hoped to commence lithium hydroxide production at Wolfsberg in the first quarter of 2025.
European Lithium shares were up 12.2 per cent to trade at 9.2 cents at 11:37 am AEST.