Lithium

Vulcan Energy shares jump on offtake deal with Volkswagen

Thu 09 Dec 21, 10:28am (AEST)
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Key Points

  • Vulcan signs its fifth binding offtake agreement with Volkswagen
  • Agreement is for an initial five-year term for 2026 delivery

Vulcan Energy Resources (ASX: VUL) has scored its fifth binding offtake agreement with German car giant, Volkswagen. 

The agreement is for an initial five-year term with commercial delivery set for 2026. 

Volkswagen will purchase a minimum 34,000 tonnes and maximum of 42,000 tonnes of battery grade lithium hydroxide for the duration of the deal. Prices will be based on market prices on a take-or-pay basis.

The weight of the Volkswagen brand will likely draw in a lot of attention for Vulcan shares on Thursday. 

Bid to overtake Tesla

After all, Volkswagen is the world’s largest automaker by revenue. The company has ambitious plans to build six large battery cell plants in Europe by the end of the decade in its bid to overtake Tesla and become the world’s top electric vehicle seller.  

Vulcan’s managing director Dr Francis Wedin welcomed the new partner, saying: 

“Through this agreement, Vulcan Energy’s Zero Carbon Lithium™ business will become a key enabler of Volkswagen’s world-leading target to produce carbon neutral EVs, including all the raw materials in the battery supply chain.” 

The deal remains subject to conditions including the successful start of commercial production and full product qualification. 

Zero carbon lithium: sold out

Vulcan’s most up-to-date production metrics from its pre feasibility study targets 40,000 tonnes of lithium hydroxide per annum by around 2026. 

 

pmw vul

 

If Vulcan’s current five offtake partners decide to purchase the minimum agreed amounts, this would equate to approximately 42,933 tonnes. Just a fraction above Vulcan’s target metrics. 

If the offtake partners are hungry for lithium and decide to exercise the maximum amounts, this would equal approximately 52,000 tonnes, more than 30% above Vulcan’s target metrics.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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