Lithium Made in Europe: European Lithium, SQM, Stellantis, and the supply chains of the future

European Lithium aims to start mining in Austria in 2026

Does lithium only exist in South America? Far from it! There are also significant deposits in Europe! The ambitious company European Lithium focuses on the discovery, exploration, and development of lithium deposits. The Wolfsberg project in Austria comprises 22 exploration licenses and an indefinite mining license. The Wolfsberg project offers 6.3 million tons of rock (measured & indicated) with a lithium content of 1.17%. Production is scheduled to start in 2026. Wolfsberg could play an important role in making Europe less dependent on lithium imports: Current media reports estimate that Wolfsberg alone could account for around 4.5% of global lithium production. The processing of the material into a battery-grade precursor has also already been arranged. To this end, the Company plans to take advantage of low energy prices in Saudi Arabia starting in 2027, thereby leveraging cost advantages over Europe. The Company estimates that processing costs will be around 80% below European levels.

Although demand for electric vehicles is currently somewhat subdued due to the difficult economic situation, recent developments show that the time for combustion engines is coming to an end. Companies like BYD and CATL are working to ensure that charging electric vehicles will soon take only as long as filling up a conventional car, including paying at the pump. European Lithium is also optimistic and believes that European demand for lithium will rise significantly by the end of this decade – the Company's website mentions an increase of 1,200%. Even though such estimates are always vague, there is little doubt that European Lithium is striking a nerve with its Wolfsberg project 270 km south of Vienna. An agreement has already been signed with BMW for the supply of lithium from the Wolfsberg mine.

SQM: Industry leader under fire

While Wolfsberg is seen as a beacon of hope for Europe's independence from lithium imports, industry leader SQM operates primarily in South America. SQM is the world's largest lithium refinery operator with over 25 years of experience in brine processing in Chile's Salar de Atacama. The Company produces over 200,000 tons of lithium carbonate and hydroxide annually, covering around 20% of global demand. SQM is also involved in the production of spodumene concentrate in Australia through a joint venture with Covalent Lithium and holds stakes in European projects for the development of sustainable battery technologies. In 2024, SQM generated revenue of USD 8.9 billion and, thanks to its size, benefits from economies of scale. Following a sharp fall in the price of lithium in recent years and strong criticism of the high water consumption involved in lithium production in South America, more and more companies in the automotive industry are looking for alternatives to lithium from Chile or Argentina.

Stellantis aligns supply chains for sustainability – Europe set to benefit

In addition to BMW, which has already signed an agreement with European Lithium, Stellantis is another key player. The automotive group plans to invest heavily in electromobility by 2030. This includes the goal of designing 60 electric models by the end of the decade and investing a whopping EUR 50 billion to achieve this. Stellantis is also committed to sustainable supply chains and resilient supply contracts and is aligning its strategic planning accordingly. Since all new vehicles delivered by Stellantis in Europe are to be electric by 2030, cooperation with a producer within the EU is an obvious choice.

The fact that European lithium is on the rise while investors are becoming increasingly skeptical about South America is also reflected in the share prices of the past six months. SQM shares lost around 18.5%. In contrast, European Lithium saw a whopping 66% increase over the same period. The vehicle manufacturer Stellantis also performed poorly on the stock market, with the general economic weakness and tariff uncertainty sending its value down by around 34% in the last six months. Although much is still likely to be in flux at European Lithium just a few months before production, the collaboration with BMW and plans for low-cost processing of Austrian lithium in Saudi Arabia already indicate that Europe could soon become less dependent on imports, at least for lithium.