French battery manufacturer Verkor, which is a partner of Renault, has signed a letter of intent with Canadian battery materials company Euro Manganese to source manganese for the production of vehicle batteries. A binding purchase agreement has yet to be negotiated.
The Canadian company says that the agreement concerns the sale of high-purity manganese sulfate monohydrate (HPMSM) from Euro Manganese’s Chvaletice manganese project in the Czech Republic. The letter of intent is not binding until an offtake agreement is concluded.
Deliveries from the first operations are expected to begin in 2027 for an initial tenure of eight years with the possibility of an extension. The agreement stipulates that the HPMSM produced by Euro Manganese must first be qualified via the Chvaletice Demonstration Plant in Verkor’s supply chain. Exactly how the price of the HPMSM from Chvaletice is set will depend on a published index for the material that is to determine fluctuations in price. This index will be published in what the companies say is a rolling three-month “quotational period”. A floor price is to ensure that Euro Manganese can meet its project financing debt covenants i.e.: the restrictions placed by lenders to finance the company’s undertaking.
This is the company’s first Term Sheet for a long-term offtake. Euro Manganese says it anticipates more such agreements as a result of the offtake tender process currently underway.
Almost a year ago, Verkor announced it wanted to build its battery factory in Dunkirk (France) just over 100 kilometres away from Renault’s eMobility industry cluster Electricity around the Douai, Maubeuge and Ruitz plants. Production of the new battery factory is scheduled to start in 2025. A pilot production facility will be located some 700 kilometres away in Grenoble, at the Verkor Innovation Center (VIC) which has a capacity of 150 MWh. In November 2022, VIC secured more than 250 million euros in financing.
Renault Group entered into a strategic partnership with Verkor in 2020 soon after the company was founded. Renault intends to purchase ten GWh from Verkor as of 2026, and 20 GWh from 2030 onwards. Renault and Verkor want to jointly develop and manufacture high-performance batteries for Renault electric cars from the C-segment upwards and for Alpine models.
“I am immensely proud of the team and their hard work in negotiation the first long-term offtake term sheet, with a priceing structure, from a Western supplier in the high-purity manganese market,” said Matthew James, president and CEO of Euro Manganese. “Verkor has undertaken due diligence on our completed feasibility study and has placed its confidence in us and our product.”
Benoit Lemaignan, CEO of Verkor, added that Euro Manganese’s project meets Verkor’s goals of securing traceable, local raw materials “that meet the highest European ESG standards.” He confirmed, “I know we can continue to rely on them for the next milestone of our development as we make our first Gigafactory project a reality.”
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