NioCorp Developments Limited revealed that it has signed an offtake term sheet with car giant Stellantis NV (NYSE:STLA, EPA:STLA) with the objective of forging a definitive supply agreement for rare earth minerals critical to electrical vehicles (EVs).
The term sheet envisages a definitive agreement for a 10-year offtake contract for specific amounts of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide that NioCorp will produce at its Elk Creek critical minerals project in Nebraska. Final volumes would be set in a definitive agreement, said the company.
The rare earth oxides are used in high-strength permanent magnets, intended for EV motors, wind turbines and consumer electronics.
In a statement, Stellantis chief purchasing and supply chain officer Maxime Picat said the carmaker plans to lead the auto industry with the commitment to be carbon net zero by 2038.
He described it as a goal that requires “innovation and a complete redefinition of our sourcing strategies.”
“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,” said Picat.
Stellantis has a constellation of 16 iconic car brands including Jeep, Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Maserati, and Ram. It has a presence in more than 130 countries, with manufacturing facilities in 30 countries.
“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 US supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets,” he added.
NioCorp stock was up 1.3% at $5.06 on the tech-dominated Nasdaq, while shares of Stellantis jumped 1.6% higher to $17.64 when the New York Stock Exchange opened on Friday.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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