Stellantis, the global car manufacturer, is aiming to decrease its dependency on China for rare earth metals used in electric vehicles. In pursuit of this goal, the company has signed a key point paper with NioCorp, an exploration company, for the potential supply of rare earths from the United States. While there is currently no binding agreement or set timetable, the collaboration represents a significant step forward, pending the development of the mining project.
The envisioned partnership includes a proposed ten-year purchase agreement for specific quantities of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide. These rare earth materials would be produced by NioCorp’s ‘Elk Creek Critical Minerals’ project, located in the southeastern region of Nebraska. However, the project’s progression is contingent on NioCorp securing adequate project financing.
At present, the agreement between the two companies exists as a “term sheet,” outlining the key points both parties expect to include. It is important to note that this document does not carry legal obligations. Stellantis also expressed its intention to aid NioCorp in expediting the commercial production of magnetic rare earth oxides in the United States, indicating its willingness to contribute to the project’s financing. However, no details regarding the required financing amount or Stellantis’ planned involvement were disclosed in the announcement. Additionally, the final delivery quantities will be determined in a subsequent “definitive agreement.”
The early stage of the Elk Creek project accounts for the limited information provided. Stellantis clarified that no economic analysis has been conducted thus far, necessitating further studies to assess the feasibility and economic viability of extracting rare earth elements while considering relevant factors. As a result, the likelihood of actual mining operations at the site remains uncertain. The establishment of a binding supply agreement is contingent upon several factors, including economic viability, regulatory approvals, satisfactory due diligence, and the negotiation of final terms.
It should be noted that NioCorp’s Elk Creek project primarily focuses on mining niobium, scandium, and titanium, with rare earth materials being an additional consideration. Stellantis confirmed that the potential production of various rare earths from the Elk Creek project is currently under evaluation. Niobium is in high demand for manufacturing special alloys and high-strength, low-alloy steel, extensively used in the automotive industry. Scandium, on the other hand, is a unique metal that, when combined with aluminum, enhances the strength and corrosion resistance of alloys, making it valuable for applications such as solid oxide fuel cells.
Maxime Picat, Chief Purchasing and Supply Chain Officer at Stellantis, emphasized the company’s commitment to becoming carbon net zero by 2038 and the need for innovative sourcing strategies. Picat stated, “By working with partners like NioCorp, we are taking important steps towards 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.”
Mark Smith, Executive Chairman and CEO of NioCorp, expressed enthusiasm about the collaborative efforts with Stellantis. Smith noted that NioCorp’s potential as a U.S. supplier of critical minerals essential for vehicle electrification provides Stellantis with valuable supply chain options and supports its growth objectives. He further highlighted the companies’ joint commitment to developing Stellantis’ magnetic rare earth supply chain and identifying a sintered rare earth permanent magnet manufacturer, which would offer Stellantis geographical flexibility in line with its ambitious carbon net zero goal by 2038.
