Stellantis, Vulcan Energy sign deal for geothermal projects in France

(Reuters) -Carmaker Stellantis has signed a new agreement with Australia-listed lithium supplier Vulcan Energy Resources aiming to help decarbonise its European operations, the two groups said on Wednesday.

As global demand for electric vehicle (EV) batteries rises, Stellantis has signed deals with multiple miners to secure key minerals, including with Vulcan, for which the world's No. 3 carmaker by sales is now the second largest investor.

The binding agreement announced on Wednesday is for the first phase of a project to develop new geothermal sources contributing to the energy supply of an industrial site in Mulhouse, eastern France, where Stellantis produces several Peugeot and DS models, including the fully-electric Peugeot e-308, the two companies said in a joint statement.

No financial details were disclosed.

In a similar deal earlier this year, Stellantis teamed up with Vulcan to develop geothermal energy projects to help production of EVs at its Rüsselsheim facility in Germany.

"Geothermal is one of many solutions we are exploring to achieve our carbon net zero goal by 2038," Stellantis Chief Manufacturing Officer Arnaud Deboeuf said.

The first phase of the project, which is located in Vulcan's focus area in the Upper Rhine valley, will include a study for the construction of geothermal renewable energy assets for the Mulhouse facility, as well as assess potential for lithium production.

Based on current assumptions, the planned renewable energy project could provide a "significant portion" of the site's annual energy needs starting in 2026, the companies said.

Stellantis and Vulcan will aim to fund the project development on a 50-50 basis, they said, adding they would also seek public funds for it in France.

(Reporting by Echha Jain in Bengaluru, Giulio Piovaccari in Milan; Editing by Sherry Jacob-Phillips and Mark Potter)