Vulcan Energy Resources Ltd (ASX:VUL) reports that it has entered into a binding lithium hydroxide offtake term sheet with LG Energy Solution, the world’s leading maker of lithium-ion batteries for electric vehicles.
The agreement runs for a five-year term that can be extended for another five years, with commercial delivery expected to begin in 2025.
For the first year of the supply agreement, LGES will purchase 5,000 metric tonnes of battery-grade lithium hydroxide, increasing to 10,000 metric tonnes per year for the second and future years. Lithium hydroxide market rates will be used to determine pricing.
The execution of a definitive formal offtake agreement on substantially the same conditions by the end of November 2021, along with the successful start of commercial operations and full product validation, are both prerequisites for the start of commercial deliveries.
Vulcan Managing Director Dr. Francis Wedin said: “This is the first binding lithium offtake term sheet for the Zero Carbon LithiumTM Project, so it is fitting that it is with the largest EV battery producer in the world. LGES’s operations are of course global, but it is already producing batteries in Europe. The agreement is in line with our strategy to work with Tier One battery and automotive companies in the European market. We look forward to a long and productive relationship with LGES.”