Stellantis Enters Into New Agreement with NioCorp to Reach Carbon Net-Zero Goal
Whilst automakers make the shift towards an all-electric lineup, there is another goal many are also aiming towards – carbon neutrality. Even going so far as to reach a carbon net zero goal within the next decade or so, automakers want to reduce their carbon footprint and produce less carbon-dioxide emissions. That doesn’t just go for how much CO2 their vehicles release via exhaust fumes. IT also means producing less CO2 during the manufacturing of vehicles. To do this, some automakers shake hands and sign agreements with companies who already have a handle on this. In early July 2023, Stellantis announced its agreement with NioCorp Developments Ltd. (“NioCorp”) and the signing of a Rare Earth Offtake Term Sheet with the objective to enter into a definitive rare earth supply agreement that will aid in Stellantis’ commitment to build stronger supply chains while also reaching carbon net zero by 2038. Mutually beneficial, the agreement will also help accelerate NioCorp’s commercial production of magnetic rare earth oxides in the U.S.
“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 U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets.” – Mark Smith, executive chairman and CEO of NioCorp
This agreement isn’t coming out of nowhere. About a month ago, Stellantis signed a binding term contract with Vulcan Energy Resources Limited to harness geothermal energy as a new form of renewable energy that is natural and clean. So, the new agreement with NioCorp is the second earth-based venture Stellantis is taking on to hit its target goal of carbon net zero, or at least carbon neutrality. The latter is a lot less clean, where carbon-neutral means balancing out the total amount of carbon emissions, whereas net-zero carbon means no carbon is emitted at all. Basically, it’s a great goal for many manufacturing facilities and industries.
NioCorp is a company developing a critical minerals to produce niobium, scandium, and titanium for better, cleaner products. They have many applications, such as Niobium that can be used to produce specialty alloys light High Strength, Low Alloy steel, a lighter yet stronger material automakers can use in the production of future models. When scandium is combined with aluminum, it can be used make alloys with increased strength and improved corrosion resistance. We all know about titanium, one of the strongest metals out there. Then there are magnetic rare earth materials that can be in a variety of defense and civilian applications.
The Rare Earth Offtake Term Sheet entered into by Stellantis and NioCorp is a 10-year offtake contract for specific amounts of neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide that NioCorp aims to produce at its Elk Creek Critical Minerals Project in southeast Nebraska. This is, of course, subject to whether or not NioCorp can secure adequate project financing to produce such compounds. It is unclear if the binding agreement is being funded via Stellantis Ventures, the corporate venture fund of Stellantis N.V. to invest in startups.
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