VW Deal Opens Doors
A major $14 billion deal with Volkswagen could soon send lithium demand soaring in Europe.
After signing an 11-figure order with the Northvolt gigafactory in Sweden, they will pay $1.4 billion every year for the next decade to help produce solid state EV batteries for their vehicles.
That’s because over the last year, Volkswagen has become one of the biggest producers of EVs in the world, as they continue closing the enormous lead Tesla once held.
And VW is set to ramp up production capacity to an incredible 1.5 million electric vehicles by 2025.
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Of course the amount of lithium needed to produce this many batteries is enormous.
And this is all happening as the European Commission is making a shocking projection about the demand for lithium.
They predict that Europe will require a supply of lithium 18 times larger than what is required today to meet their 2030 goals.
The total sales of EVs more than doubled last year throughout Europe, and it doesn’t appear that trend will be slowing down any time soon.
Northvolt, the Swedish gigafactory started by a former Tesla executive, will now be right at the center of Europe’s EV boom.
Which is why they’ll need a steady supply of lithium brought in to help them make good on the $27 billion in contracts they’ve now brought in over the last 2 years.
Northvolt already has deals in place with other automakers like BMW, along with contracts with other major partners and customers like ABB, Scania, Siemens, Vattenfall, and Vestas.
And after adding Volkswagen to the list, this could mean big news for United Lithium too.
United Lithium is a junior mining company that just acquired an exciting new project in Bergby, Sweden, which could soon deliver lithium to Northvolt with just a short commute down the highway.
The Bergby project makes up 1,903 hectares of land, and historical testing suggests it may be sitting on an incredible endowment of lithium.
Plus, with the largest highway in the country running just outside the property, it’s extremely easy to deliver lithium to major players like the Northvolt plant producing lithium batteries.
But Northvolt isn’t the only gigafactory that is expected to need a steady supply of lithium in the days ahead.
There are dozens of other European lithium battery factories close-by.
And with the Bergby property within just 5 km of a deep water port, that means United Lithium could easily transport the mineral to Germany, Poland, Austria, and several other countries in the area.
If all goes according to plan, they could become a major producer of lithium as Europe’s EV production is expected to become one of the biggest markets in the world.
With demand spiking, lithium spot prices are already up 88% on the year.
But the economics could get even better for United Lithium thanks to their unique, new mineral process.
They recently signed an agreement to develop a new lithium purification protocol with the help of research lab, Process Research Ortech.
This is expected to not just lower the cost of purifying the lithium, but to lower the carbon footprint of producing it as well.
With the rise of ESG funds across the globe, this could also draw more attention to United Lithium as they could patent this innovative technology if proven successful.
Here’s how it works.
They start by dissolving the lithium bearing rock in a solution like acid.
Then while in solution separate the lithium from impurities or minerals like aluminum, iron, calcium, etc., and it leaves you with purified lithium in the solution.
Then the final step turns lithium into a solid state again, becoming lithium carbonate, one of the 2 chemical compounds used to make EV batteries.
This unique process if successful will be unlike any other in the world, and it’s expected to produce greener lithium at prices that are extremely favorable to the company.
And with lithium demand spiking in a key area of Europe, this could be an incredible time for United Lithium as they prepare to launch their upcoming drill program.
9,000m of Drilling Set to Kick Off
As United Lithium just finalized the acquisition at Bergby, their team is now planning to plow ahead and begin a 9,000m drill program in Q2.
And there’s plenty of reason for excitement given what we’ve already seen on the property.
In several areas, lithium outcrops right at the surface, making it visible even before drilling begins.
This means drilling expenses should be much lower than in many other areas, as United Lithium wouldn’t need to drill hundreds or thousands of meters into the ground before reaching the precious mineral.
And historical data suggests that once drilling begins, Bergby could deliver a rich endowment of lithium as well.
Whereas many mining companies are thrilled to discover 1% or 2% lithium in other areas like Canada, several holes on the Bergby property showed grades that ran much higher.
In fact, the lithium in some of these holes reached as high as 3% or 3.5% lithium.
But previous data shows that lithium didn’t just mineralize in small areas throughout the property.
The previous owners of the Bergby property did an initial test of 33 drill holes back in 2017.
Of those 33 holes, 28 of them intersected lithium mineralization.
That means United Lithium could be sitting on a potentially massive discovery.
Plus, results showed the lithium mineralization is open on strike, which means it could run even further in either direction.
There’s no telling how much lithium they could discover once drilling begins. And after acquiring the property officially, they’re now set to race ahead.
The drill program is expected to kick off shortly in Q2. And they’re planning to complete this entire 9,000m program by the end of the year.
The company has announced it’s set to take place in 3 phases.
In phase 1, they’ll start by drilling along strike and starting with the sites that are already proven to have lithium mineralization.
They’ll also gather more valuable information using heliborne magnetic and radiometric airborne surveys to put them in the best position possible for the next 2 phases.
After drilling is complete in the first phase, core samples will be sent to the lab for testing.
From there, it could be just a matter of weeks until news rolls out confirming exactly how much lithium we may be looking at.
With the demand for lithium spiking, many across Europe are expected to be watching closely for this news.
In phase 2, they’ll begin another 3,000m of drilling to help them better define the mineralized zone and get accurate calculations.
That’s a key piece for planning for future drill programs and could even help them establish a resource report.
Phase 3 will bring 3,000m of drilling along strike and will help them verify and validate any other potential new targets.
With United Lithium set to move ahead within weeks, this could provide incredible news in Europe’s EV boom.
And the upside is enormous. While VW signed an order with Northvolt worth a gargantuan $14 billion, United Lithium currently sits at a market cap of just $33 million.
That’s why now is the most exciting time for United Lithium, as positive news could have massive implications for Europe’s EV industry in the days ahead.
Download our new report to discover why this could be the most exciting phase for investors in United Lithium’s new discovery
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