European Lithium strikes deal with BMW

European Lithium has signed a U$15 million deal with automotive manufacture BMW to supply its first batch of battery grade lithium.

BMW will secure the West Leederville-based company’s first offtake of battery grade lithium hydroxide if and when its Wolfsberg Lithium project in Austria becomes operational.

The German automotive manufacturer is set to make an advanced payment of U$15 million, which is set to be repaid through lithium delivered to BMW.

The long-term lithium offtake agreement was signed through European Lithium’s Austrian subsidiary ECM Lithium.

Conditions of the agreement hinge on the start of successful commercial production at Wolfsberg, which is expected to begin in 2026 for an initial period of six years.

European estimated 50,000 metric tonnes of battery grade lithium hydroxide will be produced in the first year, with 5,000mt and 9,000mt in the subsequent years.

European Lithium executive chairman Tony Sage said the agreement was a key milestone for the company.

“With the signing of the binding offtake agreement with BMW, our first offtake is secured, and we look forward to partnering with BMW in the future,” he said.

New York firm Jett Capital Advisors is acting as the financial advsior for European and Critical Metals Corp. 

CMC is a newly formed company following a merger with Nasdaq-listed Sizzle Acquisition, a special purpose aquisition company. 

Once the transaction has been completed, CMC will own the Wolfsberg project, with European remaining as the largest shareholder in the new company. 

In 2021, European was raising $6.5 million from a share placement to finish a feasibility study of the Wolfsberg project, as well as fund exploration and working capital. 

At 1:29 pm AEDT, European Lithium shares were down 1.32 per cent to trade at 0.75 cents.