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.