Tuesday , July 27 2021
Breaking News
Home / Business / Rinehart-backed Vulcan signs deal with e-vehicle battery giant

Rinehart-backed Vulcan signs deal with e-vehicle battery giant

Billionaire Gina Rinehart’s bet on green energy has yielded a significant win, with ASX-listed lithum explorer Vulcan Energy Resources scoring a supply deal with the world’s largest supplier of lithium-ion batteries for electric vehicles (EVs).

Vulcan, which is backed by both Rinehart and her son John Hancock, told investors on Monday that it had secured 5 year supply agreement with LG Energy Solution. Under the terms of the agreement, starting in 2025, Vulcan will initially supply 5,000 tonnes of battery-grade lithium hydroxide to LG Energy. The output will increase to 10,000 tonnes by the second year and deal can be extended for a second five-year term.

Climate sceptic Gina Rinehart is a significant shareholder in Vulcan Energy Resources which plans to produce lithium with a zero carbon footprint.

Climate sceptic Gina Rinehart is a significant shareholder in Vulcan Energy Resources which plans to produce lithium with a zero carbon footprint.

“This is the first binding lithium offtake (agreement) for the zero-carbon lithium project, so it is fitting that it is with the largest EV battery producer in the world,” said Vulcan chief executive Dr Francis Wedin.

“The agreement is in line with our strategy to work with tier one battery and automotive companies in the European market,” he said.

Lithium is the key ingredient in the batteries for EVs, which finally look poised to take the ascendancy over their petrol-powered rivals. EVs are mandated to entirely replace petrol-powered cars in the UK and German markets within the decade, and in other major economies in the following years.

Vulcan is planning to produce zero-carbon lithium from hot underground springs in Germany’s Upper Rhine Valley. It also plans to use the thermal power – generated by the boiling water that it extracts the lithium from – to ensure its operations are carbon neutral when production starts in 2024.

The rise of EVs, and Vulcan’s green credentials, saw the stock end up as the ASX’s top performing stock for 2020. It went from 23 cents last year to as high as $14.20 in January this year. Vulcan shares rose to a high of $10.19 on Monday morning and were trading 1.7 per cent higher at $9.49 around midday.

Vulcan will need to raise billions in fresh capital to get there. Phase 1 alone will require over €1 billion ($1.6 billion) in capital to set up.

Vulcan shares have risen from $8 to above $10 in recent weeks as reports surfaced that Vulcan is in negotiations with a number of key manufacturers in the European battery and electric vehicle markets.

About admin

Check Also

Kisume restaurant tower in Flinders Lane sells for $25m

A Flinders Lane building occupied by one of Melbourne’s top restaurants, Chris Lucas’ Kisume, and …