Perth lithium play draws major car manufacturer

Zero carbon lithium aspirant Vulcan Energy Resources has won backing from multinational automaker Stellantis, taking up $76 million worth of stock to become its second-largest shareholder.

The corporation behind 16 car brands including Alfa Romeo, Chrysler, Citroen, Fiat and Maserati, acquired an 8 per cent interest, or roughly 11.45 million shares, in the Perth-based ASX-lister at $6.22 apiece.

Pricing for the securities was based on Vulcan’s 30-day volume-weighted average price.

Stellantis and Vulcan already had an offtake agreement in place, which has been extended by five years to 2035 in tandem with the investment.

Vulcan has lined up a handful of automotive companies for product from its proposed namesake zero-carbon lithium project in the Upper Rhine Valley in Germany, including Volkswagen and Renault Group.

Fellow lithium hopeful Liontown Resources also recently signed off on an automotive offtake deal, but for spodumene concentrate from its planned Kathleen Valley outfit with Tesla.  

Vulcan managing director Francis Wedin said Stellantis’ investment in Vulcan was a strong statement regarding sourcing battery minerals.

“It is encouraging to see a leading automaker investing in local, decarbonised lithium production for electric vehicles,” Mr Wedin said in a statement.

“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.”

Other major shareholders in Vulcan include early backer Gina Rhinehart via Hancock Prospecting, which had a 5.64 per cent stake in the company as of March.

Vulcan’s chair and serial entrepreneur Gavin Rezos had a 5.77 per cent stake at that time.

This morning's news has lifted Vulcan’s share price by 28.8 per cent, last changing hands at $6.44.

It comes amid what some have described as a border correction in the lithium market, driven by mixed forecasts on the commodity's outlook. 

This was typified by new ASX-lister Leo Lithium, which had a shaky start to its first day on the exchange on Thursday.

Vulcan shares reached $10.66 at the beginning of April.