(Reuters) -Carmaker Stellantis will invest 50 million euros ($52 million) to buy a 8% stake in miner Vulcan Energy Resources, becoming its second largest shareholder and extending to 10 years a supply agreement for climate-friendly lithium.
Vulcan, a German-Australian start-up, 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 open-pit mines and brine evaporation ponds.
Stellantis Chief Executive Carlos Tavares said on Friday the deal was part of the automaker's strategy to form strong relationships with partners amid a collective effort to fight global warming and provide clean, safe and affordable transport.
"Making this highly strategic investment in a leading lithium company will help us create a resilient and sustainable value chain for our European electric vehicle battery production," he said in a statement.
Stellantis, the owner of brands including Jeep, Peugeot, Fiat, Citroen, Maserati and Opel, has a plan to for battery electric vehicles to make up 100% of its European passenger car sales by 2030.
In November last year, Vulcan and the Italian-French group had signed an initial binding deal to supply between 81,000 and 99,000 tonnes of battery-grade lithium hydroxide from Germany to Stellantis for five years from 2026.
Australia-headquartered Vulcan said in a statement it would issue about 8.5 million shares to Stellantis at A$6.622 per share, representing a 32.4% premium to the stock's Thursday closing price. Its shares closed Friday's session up 26.8%.
Vulcan, which now has lithium supply deals with French automaker Renault SA (EPA:RENA), Belgian recycling group Umicore NV and South Korea's LG Chem Ltd, said it would use the proceeds to expand drilling at its lithium-extraction project in the Upper Rhine Valley, Germany.
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