Following the binding term sheet signed on 2 August 2021 (earlier post), Vulcan Energy Resources has signed a binding lithium hydroxide offtake agreement with Renault Group. Following the launch of Renault ElectriCity—a new production unit for electric vehicles in Europe—the Group will purchase between 26,000 to 32,000 metric tonnes of battery-grade lithium chemicals over the duration of the agreement.
Consistent with Vulcan’s strategy to decarbonize the battery materials sector, the partnership with Vulcan will allow Renault Group to avoid between 300 to 700 kg of CO2-equivalent emitted for a 50-kWh battery.
The agreement is for an initial six-year term and the start of commercial delivery is set for 2026. Pricing will be based on market price on a take-or-pay basis.
Conditions precedent include successful start of commercial operation and full product qualification.>
The completion of this definitive offtake agreement means Vulcan’s Zero Carbon Lithium business will be directly enabling Renault to meet its commitment of producing carbon-free EV batteries and becoming carbon neutral, as part of its “Carbon neutrality – Green as a business” strategy. For Vulcan, the agreement is consistent with our strategy to enter into long term, stable supply agreements with companies that share our ethos on sustainability and decarbonisation ambitions. We look forward to a long and productive relationship between Vulcan and Renault Group going forward.
Partnership with a European lithium producer such as Vulcan is an important milestone in realizing our commitment to reach 30% emissions reduction for our supply chain by 2030. Low carbon footprint of battery chemicals is key for us, as our ambition is to offer the most sustainable vehicles in the market.
Vulcan aims to become the world’s first lithium producer with net zero greenhouse gas emissions. Its Zero Carbon Lithium Project intends to produce a battery-quality lithium hydroxide chemical product from its combined geothermal energy and lithium resource, which is Europe’s largest lithium resource, in Germany.
Vulcan’s project aims to produce both renewable geothermal energy and lithium hydroxide from the same deep brine source. In doing so, Vulcan intends to address lithium’s EU market requirements by reducing the high carbon and water footprint of production, and total reliance on imports. Vulcan aims to supply the lithium-ion battery and electric vehicle market in Europe.