Stellantis in Auburn Hills and NioCorp Developments Ltd. in Colorado have signed a rare earth offtake term sheet to support Stellantis’ commitment to build a strong supply chain of material needed for electric vehicle batteries.
The agreement is designed to help Stellantis reach its stated goal of being carbon net zero by 2038, and also should help accelerate 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,” says Maxime Picat, chief purchasing and supply chain officer for Stellantis.
“By working with partners like NioCorp, we are taking important steps, with the aim of decarbonizing 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.”
The term sheet envisions an agreement for a 10-year offtake contract for specific amounts of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide that NioCorp aims to produce at its Elk Creek Critical Minerals Project in southeast Nebraska. The agreement is subject to the receipt of adequate project financing. Final volumes would be set in a future agreement.
“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,” says Mark Smith, executive chairman and CEO of NioCorp.
“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.”
Given no economic analysis has been completed on the rare earth mineral resource comprising the Elk Creek Project, studies will be done before determining whether extraction of rare earth elements can be reasonably justified and is economically viable after taking account of all relevant factors.
A binding offtake agreement is subject to the completion of due diligence, the negotiation and settlement of final terms, the negotiation of definitive documentation, and customary closing conditions, including regulatory approvals. It’s possible there could be no final agreement.
