UPDATE 1-Stellantis inks deal with Vulcan for CO2-free lithium supply in Europe

·2 min read

* Vulcan to supply up to 99,000 tons of lithium

* Supplies to Stellantis will start in 2026

* Stellantis will have three battery facility in Europe (Recasts, adds details)

BERLIN, Nov 29 (Reuters) - Carmaker Stellantis has signed a preliminary deal with lithium developer Vulcan Energy Resources for the supply of climate-friendly lithium from Germany, the two companies said on Monday.

Stellantis is the latest automaker to sign a deal with the German-Australian start-up to lock down supplies of the battery metal ahead of an expected surge in global demand as a transition towards cleaner mobility gains traction.

As part of the five-year agreement, Vulcan will supply between 81,000 and 99,000 tonnes of battery-grade lithium hydroxide in Europe to Stellantis from 2026, they said in a statement. No financial details of the agreement were provided.

Vulcan is one of a number of companies testing a direct lithium extraction (DLE) method that uses less land and groundwater, making it more sustainable than the most-common existing methods of open-pit mines and brine evaporation ponds.

Stellantis - which was formed at the beginning of this year through the merger of Fiat Chrysler and Peugeot maker PSA - has pledged to invest more than 30 billion euros ($33.8 billion) through 2025 on electrifying its vehicle line-up.

As part of this plan the group will build three battery production facilities in Europe, two in Germany and France through its ACC joint venture with Daimler and TotalEnergies and one in Italy, though details about it are still to be disclosed.

Stellantis, whose brands include Opel, Citroen, Jeep and Alfa Romeo, is targeting more than 70% of sales in Europe to be of low-emission vehicles by 2030.

"This agreement is further proof that we have the competitive spirit to deliver on our commitments," Stellantis Chief Purchasing and Supply Chain Officer Michelle Wen said.

The announcement comes a week after Vulcan signed a second deal with French automaker Renault to supply up to 32,000 metric tonnes of battery-grade lithium chemicals from its geothermal brine deposits in Germany.

Vulcan already has supply deals with Belgian recycling group Umicore and South Korea's LG Chem Ltd.

($1 = 0.8872 euros) (Reporting by Madeline Chambers in Berlin and Giulio Piovaccari in Milan; Editing by Raissa Kasolowsky and Emelia Sithole-Matarise)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting