Stellantis N.V. and Vulcan Energy Resources Limited have signed a binding term sheet for the first phase of a multiphase project to develop new geothermal projects aimed at decarbonizing the energy mix of Stellantis’ Mulhouse industrial site in France, which is home to the DS 7, Peugeot 308 and 308 SW, 508 and 508 SW and the new 408 models.

Based upon current assumptions, the planned renewable energy project could provide a significant portion of the industrial site’s annual energy needs starting in 2026.

The agreement is the fourth between Stellantis and Vulcan, after:

• a binding lithium hydroxide supply agreement signed in 2021;

• an equity investment and binding lithium hydroxide supply agreement in 2022; and

• a joint renewable energy project development term sheet for the Stellantis Russelsheim plant in Germany signed in 2023.

The first phase of the new project, located at the southernmost extent of Vulcan’s focus area in the Upper Rhine Valley, will include a Pre-Feasibility Study (PFS) for the construction of geothermal renewable energy assets for Stellantis’ facility, carried out by Vulcan, which will also assess potential for lithium production. If successful, the next phase will focus on more advanced studies and development.

Stellantis will aim to source funding for 50% of the project development, and the parties will seek public funding for the project. Subject to a successful PFS, Stellantis and Vulcan aim to develop the project jointly on a 50:50 basis. Stellantis and Vulcan will aim to jointly produce clean, renewable energy for internal consumption at Stellantis’ manufacturing site.

In November 2022, Vulcan announced that it had started a number of initiatives to expand its geothermal renewable energy and Zero Carbon Lithium business into France and specifically Alsace, which accounts for roughly one-third of the Upper Rhine Graben. Vulcan has applied over the Mulhouse area for an exclusive lithium and geothermal license to secure another 480 km² of development area within the Upper Rhine Graben Valley Brine Field. According to the term sheet, Vulcan’s team will perform a lithium mineral resource assessment according to the JORC Code.

Vulcan’s Zero Carbon LithiumT project is aligned with the creation of the “French Mineral Resources Observatory” that aims to analyze the French critical raw materials resources and provide recommendations for public investment that will be supported by the recently announced new €2 billion “French Critical Raw Materials Fund”.

The agreement with Vulcan Energy marks Stellantis’ second potential use of renewable geothermal energy to decarbonize and localize its energy supply at an industrial site.

Vulcan is developing integrated lithium chemicals and geothermal renewable energy production, from its Zero Carbon Lithium Project in the Upper Rhine Valley in Germany and France. Its sorption-type Direct Lithium Extraction (DLE) optimization plant is nearing completion in Germany, and Phase One commercial operations are entering the execution phase, following 2 years of successful pilot plant operations.