Vulcan Energy Signs Lithium Hydroxide Supply Deal With LG Chem Unit
Vulcan, which operates in Germany’s Black Forest area, said LG Energy Solution (LGES) would buy 5,000 metric tonnes (mt) of battery grade lithium hydroxide for the first year.
MELBOURNE : Australia-listed lithium miner Vulcan Energy Resources on Monday said it has signed a long term supply agreement to sell lithium hydroxide from its project in Germany to LG Chem Ltd’s battery unit.
Vulcan, which operates in Germany’s Black Forest area, said LG Energy Solution (LGES) would buy 5,000 metric tonnes (mt) of battery grade lithium hydroxide for the first year, and subsequently ramp it up to 10,000 mt per year, under a deal that will run for at least five years. LGES, a unit of South Korea’s LG Chem, will buy the chemicals to produce battery cathode at market prices, Vulcan said in a statement.
It is the first deal of its kind for Vulcan’s project in Germany, and would account for a quarter of total output once the project is fully ramped up from 2026.
Vulcan has previously said it is open to selling 80% on long term deals, and the remainder on the spot market, but depending on deal and supplier, Vulcan could up that to 100%, managing director Francis Wedin said.
“We will keep an open mind. We could go to 100% potentially of future supply we will just have to take it as it comes,” he said.
“At the moment we are in a really nice position here we’re getting overwhelmed with demand from OEMS (original equipment manufacturers,” he told Reuters.
Vulcan signed a memorandum of understanding with the French-Italian automaker Stellantis to supply lithium, a key ingredient in making electric vehicle (EV) batteries earlier this month.
The company is looking at growth in Germany’s Rhine Valley, including the possibility of buying other projects, and is considering a European listing, he said, given strong demand for the company’s lithium due to its zero carbon production profile.
Vulcan plans to invest 1.7 billion euros ($2.01 billion) at its project in Germany to deliver lithium, an attractive solution for automakers looking to procure the white metal with minimal disruption to the environment.
Vulcan extracts lithium from geothermal brine that is used for renewable power in Germany, recycling the water, and without emitting carbon dioxide, in contrast to hard rock lithium mining in Australia, and evaporation from ponds in South America which use up water in an arid environment.
The deal with LGES, is for an initial five year term from when production begins midway through 2024 and can be extended by five more years. It is expected to be finalised by the end of November, Vulcan said.
Source : reuters
