Vulcan Resources is developing what is says is a high-potential lithium deposit in Germany, which the company expects will be able to supply the surging European market for battery technologies.
One key advantage of Vulcan’s lithium project is its proximity to a useable source of geothermal energy, that the company plans to tap to power its operations, allowing it to produce marketable lithium with zero associated greenhouse gas emissions.
Securing the binding offtake agreement with Renault, which will see the French automotive firm purchase between 6,000 and 17,000 metric tonnes per year of battery-grade lithium materials. The deal will last for an initial term of five years, with an option for extension.
Under the agreement, the first deliveries of lithium would b expected to commence in 2026, with the price paid to be tied to market rates.
Vulcan said that the supply of zero-emissions lithium would allow Renault to market future models of electric vehicles as being fully-made in Europe – using locally produced batteries – while also significantly reducing the emissions footprint of the vehicles sold.
“It is important that we work with companies who share our ethos on sustainability,” Vulcan Energy’s managing director Francis Wedin said.
Vulcan says the use of its zero-emissions lithium supplies would help Renault slash the carbon dioxide footprint of a 50-kWh battery unit by between 300 and 700 kilograms.
“We are very proud to partner with a European lithium producer with a net zero greenhouse gas emissions such as Vulcan Energy,” Renault Groups’ Gianluca De Ficchy said.
“Our environmental and social responsibility is at the heart of the Renaulution and this must also apply to the providers we partner with if we want to create real value and offer the most sustainable vehicles in the market.”
The deal with Renault follows a similar offtake agreement signed between Vulcan and LG Energy Solutions, which will purchase between 5000 and 10,000 metric tonnes of lithium hydroxide for use in its electric vehicle battery products.
In January, Vulcan revealed that it had received positive early results from a feasibility study undertaken into its Zero Carbon Lithium project, proposed for the Upper Rhine Valley of Germany.
The feasibility study found that the €1.74 billion (A$2.7 billion) project had the capacity to produce as much as 40,000 tonnes of lithium hydroxide annually, from an estimated deposit of 1.12 million tonnes of lithium carbonate.
The deposit itself can act as a source of geothermal heat, which the company says could be used to generate electricity – providing a source of zero emissions power.
Following the successful feasibility study, shares in Vulcan Energy have surged by more than 350 per cent and the company was able to use this momentum to successfully raise $120 million in February to fund the company’s expansion.