Saturday, January 22, 2022

Renault places big lithium order with Vulcan Energy

Vulcan Energy has reached a binding lithium purchase agreement with Renault. However, there is a catch: the delivery volume is less than was stated when the supply agreement was announced in August.

The quantity of the contract is between 26,000 and 32,000 tonnes from 2026 onwards – not per year, however, but over the entire contract period of six years. That would be between 4,333 and 5,333 tonnes per year on average.

The agreed delivery start date remains 2026. As of today, Vulcan Energy does not have a sufficiently large production plant. As reported, the company wants to filter and process lithium hydroxide contained in geothermal brine in Germany. Vulcan is not yet able to give any details on the financial scope of the binding order for one simple reason: No prices have yet been agreed. “Prices will be based on the market price on a take-or-pay basis,” the company writes.

Vulcan Energy Stock performance for the Week

The company does not provide any information on the reasons for the reduced delivery quantities in the same press release. Instead, Managing Director Francis Wedin makes a statement very similar to the one he made in August.

“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,” Wedin is quoted as saying. “We look forward to a long and productive relationship between Vulcan and Renault Group going forward.”

At the very end of its announcement, Vulcan Energy also states that the agreement includes “conditions precedent”: “The successful commencement of commercial production and full product qualification”.

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