I believe the Sunrise management team is more mature and astute on how the global car and battery market works from a political and corporate perspective.
For Sam to be repeatedly invited to the European automotive industry boardrooms to essentially mentor and educate their senior management teams on why they need to invest directly in mining has been an ongoing discussion point over the past 4 years. The tide is turning in our favour, starting with the Lithium miners, and the light bulb moment for some in the car industry is beginning in relation to the importance of ESG upstream sourcing of raw materials, building of supply chains and commodity pricing.
This week, Stellantis invested $76 million equity into Vulcan Energy. From VUL ASX announcement;
- Vulcan understands that this represents the world’s first upstream investment in a listed lithiumcompany by a top tier automaker.
- Stellantis will become the second largest shareholder in Vulcan, at 8% shareholding, following issueof the fully paid ordinary shares at the 30-day Volume Weighted Average Price (VWAP) of A$6.622(€4.367) per share which represents ~11.450m shares.
- Use of proceeds will go towards Vulcan’s planned production expansion drilling in its producingUpper Rhine Valley Brine Field (URVBF). Vulcan is already producing geothermal energy from itsURVBF and plans to produce lithium hydroxide with zero fossil fuels and net zero carbon footprint aspart of the Zero Carbon Lithium Project.
- Vulcan and Stellantis have also extended their binding lithium hydroxide offtake agreement (see ASXrelease 29/11/2021) by five years, to 2035.
- Stellantis is one of the world’s leading automakers and mobility providers. It has a portfolio of 14vehicle brands and two mobility companies. Stellantis was the market leader in the low emissionvehicle category (LEV) for Passenger Cars and Light Commercial Vehicles in the main Europeancountries region in Q1 20222.
- Aligned with Vulcan’s mission to decarbonise and electrify transportation, Stellantis has one of thelargest electrification and decarbonisation plans of any automaker globally, reaching 100% ofpassenger car battery electric vehicle (BEV) sales mix in Europe by 2030. In addition, Stellantis alsoincreased planned battery capacity by 140 GWh to approximately 400 GWh, to be supported by fivebattery manufacturing plants in Europe and North America, together with additional supplycontracts.
Investment in Vulcan was helped by it differentiating itself from other Lithium producers thanks to its net zero greenhouse emission process using geothermal energy in the heart of Germany. Vulcan has also de-risked the project in relation to availability of key equipment, brine flow rates, resources/reserve estimates, lithium extraction process, permitting and social acceptance.
A possible learning from Vulcan Energy is the level of community engagement undertaken, as seen in the table below.
VUL Corporate Presentation - May 2022, page 28
The SRL PR department may need to step up a notch in its efforts for promoting the project via the above categories. This is happening in the background but their is all ways room for improvement.
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