European Lithium nabs binding offtake agreement with BMW
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European Lithium has signed a binding long term offtake agreement with BMW for battery grade lithium hydroxide (LiOH) from its Wolfsberg Lithium project in Austria.
Securing its first offtake is a key milestone which will allow European Lithium (ASX:EUR) to focus on the final steps of development and construction of the Wolfsberg project while it looks to the future and builds a portfolio of prospective battery metals projects in Europe.
The supply of lithium hydroxide is expected to begin in 2026 and continue for six years until 2031, at which time the offtake agreement can be extended for three years.
The offtake deal with BMW is for approximately 50,000 metric tonnes of battery grade lithium hydroxide, commencing in the first year with 5,000 metric tonnes and 9,000 metric tonnes each year thereafter.
As part of the deal, BMW will make an advance payment of US$15 million which will be repaid through equal set-offs against LiOH delivered to BMW.
And the company’s Austrian subsidiary ECM Lithium AT GmbH (ECM) has also granted BMW the first right to refuse to purchase 100% of the LiOH produced from the identified resources at Wolfsberg.
“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,” European Lithium (ASX:EUR) executive chairman Tony Sage said.
Conditions precedent includes successful start of commercial production and full product qualification and verification.
The offtake deal comes after European Lithium recently announced its wholly owned subsidiary – European Lithium AT Investments (the holder of the Wolfsberg project) will roll into a new company named ‘Critical Minerals Group’, which will be merged with NASDAZQ listed Sizzle Acquisition Corp
In return, the company will be issued US$750m worth of shares in Critical Minerals, equivalent to an 80% interest.
That will give Critical Minerals an implied market capitalisation of US$972m ($1.5b) and pro forma enterprise value of US$838m.
The eventual plan is for Critical Minerals to list on NASDAQ.
This article was developed in collaboration with European Lithium (ASX:EUR), a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.