Vancouver B.C.-based lithium explorer and developer Rock Tech Lithium Inc. (RCK:TSX.V; RCKTF:OTCQX; RJIB:FSE; A1XF0V:WKN), which owns a 100% interest in the Georgia Lake lithium project in Ontario's Thunder Bay Mining District, yesterday announced that "it has entered into a definitive supply agreement with Mercedes-Benz Group AG (MBGYY:OTCMKTS;MBGAF:OTC-Pink) providing for the supply of an average of 10,000 tonnes of battery-grade lithium hydroxide per year."
The agreement between the two companies will run for a period of five years and is expected to provide Rock Tech with total revenues of around CA$2 billion over the life of the agreement.
Rock Tech's CEO Markus Bruegmann remarked, "Signing the Supply Agreement marks a significant milestone of our offtake strategy, and I am honored that Mercedes-Benz demonstrates trust in Rock Tech as a new but reliable player in a diversified European battery supply chain."
The contracted deliveries will account for about 40% of the forecasted annual production from Rock Tech's planned converter capacity in Guben, Germany.
Rock Tech's CEO Markus Bruegmann remarked, "Signing the Supply Agreement marks a significant milestone of our offtake strategy, and I am honored that Mercedes-Benz demonstrates trust in Rock Tech as a new but reliable player in a diversified European battery supply chain."
"We intend to focus our efforts on providing lithium hydroxide that will help to bring Mercedes-Benz's electric mobility ambitions into action. This arrangement is a major step forward in our plans to directly contribute to clean mobility," Bruegmann added.
Mercedes-Benz Group's Chief Technology Officer Markus Schäfer commented, "This significant amount of lithium sourced directly from Rock Tech will help Mercedes-Benz to advance localization of European production of state-of-the-art battery cells. The on average 10,000 tonnes of lithium hydroxide per annum will play a key role in securing the lithium supply for our battery production in Europe to help achieve our ambitious electrification goals."
It is anticipated that the high-quality lithium hydroxide produced by Rock Tech will allow Mercedes-Benz to scale up production and equip approximately 150,000 electric vehicles (EVs) with premium high-performance batteries.
Both firms are striving to meet their goals of achieving carbon neutrality and, as part of the agreement, are committed to creating a roadmap to achieving CO2-neutral production of lithium hydroxide by year-end 2030. The companies noted that to ensure this objective is met, the agreement specifically requires that "all lithium hydroxide supplied by Rock Tech shall be sourced from mining sites audited by the Initiative for Responsible Mining Assurances (IRMA)."
Rock Tech is headquartered in Vancouver, B.C., and is focused on the exploration and development of lithium properties. The company holds a 100% interest in the Georgia Lake lithium project located within Ontario's Thunder Bay Mining District. In addition to its upstream activities, the firm is investing in downstream operations, with the first planned lithium hydroxide converter built in Germany to supply the EU auto market with the materials needed to manufacture EV batteries. Approximately 40% of the product produced at this plant will be sold to Mercedes-Benz to satisfy the recently signed 5-year supply contract.
Mercedes-Benz Group AG is dedicated to moving toward CO2 neutrality and is strategically acting to transform its vehicle production to an all-electric platform. The company is highly focused on developing and integrating advanced battery cell technology with higher energy density and safety to increase the quality, range, and performance of its cars and vans.
Rock Tech Lithium has a market cap of around US$178.3 million, with approximately 84.7 million shares outstanding. RCKTF shares opened nearly 28% higher yesterday at US$2.63 (+US$0.572, +27.79%) over the previous day's US$2.058 closing price. The stock traded yesterday between US$2.44 and US$2.70 per share and closed for trading at US$2.68 (+US$0.622, +30.22%).
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