Move over Newcastle United — European Lithium has taken steps to become a first mover in mining investment in Saudi Arabia, signing a non-binding MoU to build and operate a lithium hydroxide plant in the Middle East.

European Lithium (ASX:EUR), which is due to deliver a landmark DFS on what will be Europe’s first hard rock lithium mine at the Wolfsberg project in Austria this quarter, announced the non-binding memorandum of understanding for a 50-50 JV with the Obeikan Investment Group today.

“The JV with Obeikan will allow EUR to focus its efforts on building the facilities to start mining concentrate in addition to benefiting from the JV opportunities,” European Lithium chairman Tony Sage said.

EUR says a reduction in operating energy costs from the proposed 50-50 JV will deliver significant savings for the Wolfsberg project.

“The huge energy cost savings will make Wolfsberg even more robust,” said Sage, who attended the Future Minerals Forum in Riyadh ahead of the MoU’s announcement.

 

European Lithium ASX EUR
EUR announced the deal after the Future Minerals Forum in Riyadh. Pic: European Lithium

 

Obeikan Investment Group is one of Saudi Arabia’s 100 largest companies, with over 3000 employees and operations in 16 countries.

Eng. Abadallah Obeikan, CEO of the Obeikan Investment Group, called the MoU a “a great step ahead in further strengthening the Saudi Australian economic collaboration,” saying it was “In-line with (the) Obeikan investment group strategy of accelerating sustainability within the energy field.”

 

Future Metals Forum

The Future Minerals Forum was hosted at the King Abdul Aziz International Conference Center in Riyadh from January 10-12, amid Saudi Arabia’s push to take a larger role in the supply and extraction of critical metals for the energy transition.

Its bill featured presentations from some of the biggest and most influential names in the mining industry, including BHP CEO Mike Henry, Rio Tinto chairman Dominic Barton, Barrick Gold CEO Mark Bristow and Ivanhoe Mines founder Robert Friedland, with over 100 exhibitors connecting with high profile investors from the Middle East, Africa and Central Asia.

Wolfsberg, which contains measured and indicated resources of 9.7Mt at 1% Li2O, is expected to be in production from 2025 and on last estimates could produce enough lithium hydroxide each year to construct batteries for 200,000 electric vehicles.

EUR signed a binding offtake agreement with European luxury auto brand BMW, giving the carmaker first rights to offtake from the project.

The company has also recently announced intentions to spin the Wolfsberg Lithium project into a new NASDAQ listed vehicle Critical Metals Corp, via a SPAC named Sizzle.

EUR will retain 80% of the shares of the newly listed Critical Metals corp, with the new company to be valued at over AUD $1.1 billion.

 

 

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

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