Stellantis is investing € 50 million in lithium startups to secure car battery metal

Stellantis holds € 50 million in Australian startup Vulcan Energy Resources with the aim of becoming the first European automaker to extract lithium from German deposits and make a substantial direct investment in the extraction of battery raw materials. Build.

This move is as automakers have to deal with soaring prices for key materials such as cobalt, nickel and lithium, putting pressure on the profitability of electric vehicles.

“Making this highly strategic investment in a major lithium company will help build a resilient and sustainable value chain for the production of batteries for electric vehicles in Europe,” said Stellantis boss. Carlos Tavares says.

The group, including the Fiat and Peugeot brands, plans to sell a total of 5 million battery-powered electric vehicles worldwide by 2030.

With the investment in Stellantis, Stellantis will become Balkan’s second largest shareholder after founder and managing director Francis Weddin. The company is also backed by a group belonging to Australian billionaire Gina Rinehart.

Vulcan has eight exploration licenses in Germany’s Overline Valley and wants to extract lithium from geothermal brine, and last year purchased an Insheim facility with an existing production license. We also have an exploration license for sites in the Monti Sabatini volcanic region near Rome.

The company plans to begin commercial delivery of lithium by the middle of the decade, subject to further approval from the German municipality and in opposition from some residents near the site. I am.

Balkan shares, listed in both Australia and Frankfurt, have fallen by more than 50% this year as part of a broader market sale after a surge in 2021.

Several other automakers, including Volkswagen and Renault, have signed procurement agreements with Balkan, but these do not include upfront investment. The company uses a technique known as direct lithium extraction, which separates metals from geothermal brine.

Last year, BMW invested in Lilac Solutions, a rival company that claims to be able to efficiently extract lithium from saltwater brine. The company didn’t reveal how much it spent on the startup, but filings show that the deal is worth a fraction of what Stellantis did.

Automakers, suffering from a continuing shortage of semiconductors and key components, have been relying on contractors for decades for materials and components before investing in technology and commodity companies to avoid supply bottlenecks. We are considering more and more.

Tesla boss Elon Musk said at a Financial Times meeting in May that it was “not out of the question” for his company to buy a mining group.

“We don’t want to buy a mining company, but if it’s the only way to accelerate the transition to electric cars,” he said, the possibilities were at the table.

But he added that such an acquisition would only make sense if Tesla could change the course of the mining company.

The price of battery-grade lithium hydroxide is skyrocketing. According to Fastmarkets pricing, it is currently trading at $ 75 per kilogram, up 400% from a year ago.

Direct lithium extraction (DLE) is different from traditional evaporation-based processes. Its proponents claim that it has higher recovery rates and stronger environmental characteristics.

Rio Tinto agreed last year to pay $ 825 million to Argentina’s DLE project, Salar del Rincon, saying it could significantly improve lithium recovery compared to solar evaporative reservoirs.

However, not everyone is convinced that a small mining company can make this technology work. Only Livent, a leading US lithium producer, can boast of using DLE technology on a commercial scale.

Stellantis is investing € 50 million in lithium startups to secure car battery metal

Source link Stellantis is investing € 50 million in lithium startups to secure car battery metal

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