The Vulcan Energy Resources Ltd (ASX: VUL) share price won't be going anywhere on Thursday.
This morning the lithium developer requested that its shares be placed in a trading halt.
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Why is the Vulcan share price halted?
Prior to the market open, the company requested that the Vulcan share price be halted whilst it prepares an announcement.
According to the release, the company is planning to make an announcement in relation to a further binding offtake agreement.
Vulcan has requested that the trading halt remains in place until the earlier of the release of the announcement or the commencement of trade on Monday 18 October.
What's happening?
At this stage it remains unclear what the new offtake agreement entails. However, it is worth highlighting that this is a further binding offtake agreement.
In August, Vulcan signed a lithium offtake term sheet with auto giant Renault for an initial five-year term. That deal is for the commercial delivery of between 6,000 to 17,000 metric tonnes per year of battery grade lithium chemicals from 2026.
The company also has an offtake agreement for lithium supply with LG Energy Solution for up to 10,000 metric tonnes per year for five years from 2026. LG Energy Solution is the world's largest producer of lithium-ion batteries for electric vehicles.
This compares to the 40,000 metric tonnes per year of battery grade lithium chemicals that the company expects to produce from its Zero Carbon Lithium Project in Germany. Which means that another large offtake agreement has the potential to secure all of its planned production years before the operation has even started.
With demand for lithium as strong as this, it is no wonder the Vulcan share price has been on fire this year.
Vulcan's shares are up almost 320% in 2021.
