Stellantis and NioCorp sign a rare earth supply agreement
Automaker Stellantis has signed a preliminary deal with NioCorp for rare earth minerals critical to electric vehicles.
Both companies signed an offtake term sheet to establish a definitive rare earth supply agreement to support Stellantis' commitment to building resilient supply chains and reaching carbon net-zero by 2038, while accelerating NioCorp's path to commercial production of magnetic rare earth oxides in the U.S.
"Stellantis intends to lead the industry with the commitment to be carbon net zero by 2038 – a goal that requires innovation and a complete redefinition of our sourcing strategies," said Stellantis Chief Purchasing and Supply Chain Officer Maxime Picat.
He added, ‘’By working with partners like NioCorp, we are taking important steps, with the aim of decarbonising mobility and ensuring strategic supplies of raw materials necessary for the success of the company's global electrification plans highlighted in our Dare Forward 2030 strategy."
Although the companies didn't disclose how much Stellantis would pay because the details of the deal are still being negotiated, according to AP, such a high-profile buyer is expected to provide a boost to NioCorp's effort to raise US$1.1bn to establish its Elk Creek mine project.
Elk Creek has an indicated resource of 632.900 tonnes of total rare earth oxides (TREO), including praseodymium, neodymium, terbium, dysprosium, niobium oxide, scandium oxide, and titanium oxide.
The preliminary term sheet outlines a 10-year offtake contract for specific amounts of these rare earth oxides. However, the volumes will be determined in a definitive agreement, subject to project financing.
Stelantiis builds sustainable supply chain partnerships
Stellantis has been actively seeking partnerships and investments to secure supply chains of rare earth minerals. Last year, Stellantis and LG Energy Solution announced an investment of over US$5bn to construct a large battery plant in Windsor, Ontario, with an anticipated annual production capacity of more than 45 gigawatt hours.
Earlier this week, Ontario announced a deal with Stellantis and LG Energy Solutions to continue construction on the NextStar electric vehicle (EV) battery plant, potentially worth up to US$15bn in tax breaks for the project. According to The Nothernminer, the province will provide US$5bn in tax breaks over ten years, while the federal government will contribute US$10bn.
This new deal follows Stellantis's strategic copper investment of US$207m in McEwen Copper, a subsidiary of McEwen Mining which holds the Los Azules copper project in Argentina.
In a press release, Mark Smith, Executive Chairman and CEO of NioCorp, said, "We are very pleased to announce that NioCorp and Stellantis have agreed to collaboratively develop Stellantis' magnetic rare earth supply chain, including helping to identify a sintered rare earth permanent magnet manufacturer that provides additional geographic optionality to Stellantis, in support of their ambitious commitment to reach carbon net-zero by 2038."
"We believe that NioCorp's position as a potential U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets.”