- Vulcan Energy (VUL) signs a binding term sheet for the supply of battery-grade lithium hydroxide to LG Energy Solution
- This is the first off-take agreement for the Zero Carbon Lithium Project which VUL is developing in the Upper Rhine Valley of Germany
- The deal covers an initial five-year term with the option to extend by a further five years and commercial delivery is set for 2025
- VUL plans to supply 5000 metric tonnes for the first year of the supply term, ramping up to 10,000 metric tonnes per year for the remainder of the term
- Shares last traded at $9.33
Vulcan Energy (VUL) has signed a binding term sheet to supply battery-grade lithium hydroxide to LG Energy Solution (LGES).
This is the first binding lithium off-take agreement for the Zero Carbon Lithium Project which VUL is developing in the Upper Rhine Valley of Germany.
Through the project, Vulcan is aiming to become the world’s first lithium producer with net zero greenhouse gas emissions.
The company intends to address lithium’s EU market requirements by reducing the high carbon and water footprint of production, and reliance on imports.
LGES is said to be the largest producer of lithium-ion batteries for electric vehicles in the world and supplies its products to global original equipment manufacturers.
While LGES operations are global, it is already producing batteries in Europe.
Under the agreement, VUL plans to supply 5000 metric tonnes of battery-grade lithium hydroxide for the first year of the supply term, ramping up to 10,000 metric tonnes per year for the remainder of the supply term.
The deal is for an initial five-year term with the option to extend by a further five years.
Commercial delivery is set for 2025, pending the successful start of commercial operation and full product qualification.
Additionally, the start of commercial delivery depends on the execution of a definitive formal off-take agreement on materially, the same terms, by the end of November 2021.
Once commercial operation starts up, VUL said the material cost will be based on market prices for lithium hydroxide.
Managing Director Dr Francis Wedin said it's fitting that the project's first agreement is with the largest EV battery producer in the world.
"The agreement is in line with our strategy to work with tier one battery and automotive companies in the European market."
Shares last traded at $9.33.