This lithium share could have a good day on Friday…
The post Vulcan share price on watch amid landmark $76 million automaker investment appeared first on The Motley Fool Australia. –
The Vulcan Energy Resources Ltd (ASX: VUL) share price will be one to watch this morning.
This follows the release of a positive announcement out of the lithium developer.
Why is the Vulcan share price on watch?
The Vulcan share price could be given a boost this morning from news that the company has received an equity investment from a major automaker.
According to the release, Stellantis is investing A$76 million into Vulcan at $6.622 per share. This is a 32% premium to its last close price and will make the automaker the companyâs second largest shareholder.
Stellantis is the name behind car brands including Chrysler, Citroën, Fiat, Maserati, and Peugeot.
Vulcan believes that this is the first time a top tier automaker has made an upstream investment in a listed lithium company.
The two parties have also extended their binding lithium hydroxide offtake agreement by five years to 2035.
What will the funds be used for?
The release reveals that the proceeds from this investment will go towards Vulcanâs planned production expansion drilling in its Upper Rhine Valley Brine Field (URVBF).
Vulcan is already producing geothermal energy from the URVBF and plans to produce lithium hydroxide with zero fossil fuels and net zero carbon footprint as part of the Zero Carbon Lithium Project.
Vulcanâs Managing Director, Dr Francis Wedin, was very pleased with the news. He commented:
Stellantisâ significant investment in Vulcan and the Zero Carbon Lithium Project represents a strong statement by one of the worldâs largest automakers regarding sustainable and strategic sourcing of battery materials.
We are fully aligned with Stellantisâ decarbonisation and electrification goals, which represent some of the most ambitious in the industry. It is encouraging to see a leading automaker investing in local, decarbonised lithium production for electric vehicles. As our largest offtaker, we look forward to deepening our relationship with Stellantis as a substantial shareholder in Vulcan and our Zero Carbon Lithium business.
The post Vulcan share price on watch amid landmark $76 million automaker investment appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
