Vulcan Energy Resources, a publicly traded lithium miner from Australia, has reportedly announced that it has inked a long-term supply deal to deliver lithium hydroxide from its facility in Germany to the battery unit of LG Chem Ltd., a South Korean chemical company.
Vulcan, which operates in southwest Germany’s mountainous Black Forest region, has stated that the LG energy solutions would purchase 5000 metric tons of battery-grade lithium hydroxide for the first year, then ramp up that number to 10,000 mt per year over the next five years.
Vulcan stated that LG Energy Solutions (LGES), a subsidiary of LG Chem, will purchase the chemicals needed to make battery cathode at market rates.
It is the first agreement of its sort for Vulcan's project in Germany, and once fully scaled up in 2026, this would account for a fourth of the overall output.
Francis Wedin, Vulcan Managing Director, stated that Vulcan had previously stated that it is willing to sell 80% of its inventory on long-term contracts and the rest on the spot market. However, depending on the agreement and the supplier, this might be increased to 100%.
Vulcan will approach the situation with an open mind. It could go to 100% potentially of future supply, but it would have to take things as they come. Wedin added.
Earlier this month, Vulcan has inked an MOU (memorandum of understanding) with Stellantis, the French-Italian car manufacturer, to supply lithium, a vital component in the production of electric vehicle (EV) batteries.
Wedin also stated that the firm is considering a European listing and is seeking to expand in the Rhine Valley, Germany, including the potential of buying other projects. Additionally, citing significant demand for the company's lithium because of its zero-carbon manufacturing profile, it is also considering a listing in Europe.
Vulcan intends to invest €1.7 billion in its lithium delivery project in Germany, making it an appealing option for automakers seeking to obtain the white metal with minimum environmental impact.