European Lithium Ltd (ASX:EUR, OTCQB:EULIF) and Saudi Arabia's Obeikan Group for Investment Company (Obeikan Group) have solidified their partnership to establish and operate a new lithium hydroxide processing plant. The Obeikan Group has officially signed the shareholders agreement, marking a significant milestone towards forming the joint venture company, Arabian New Energy. The next steps involve securing registration and approval from Saudi Arabia's regulatory authorities to proceed with incorporation.

This joint venture, structured as a 50-50 partnership, aims to construct a large-scale lithium hydroxide processing facility in the Kingdom of Saudi Arabia. The plant's primary objective will be to process spodumene concentrate sourced from Austria's Wolfsberg Lithium Project, specifically from Zone 1. Arabian New Energy will hold exclusive rights to purchase spodumene from Wolfsberg's Zone 1 under the terms of the shareholder agreement.

The facility's development will align with European Lithium’s binding long-term supply agreement with BMW, established in 2022, ensuring compliance with initial capacity and product specifications. Pricing for the lithium spodumene concentrate from Wolfsberg's Zone 1 will be finalized under agreed floor and ceiling rates.

A development committee will oversee collaborative decision-making on critical aspects of the plant's development. Upon completion of signing by Critical Metals Corp (CRML) Ltd, where EUR holds a majority stake, the collaboration terms will become legally binding for all involved parties. This development marks a significant step forward for European Lithium, positioning the company to expand its production capabilities and strengthen its market presence through strategic partnerships in Saudi Arabia.

Tony Sage, Executive Chair, highlighted the significance of this achievement for the Wolfsberg project, building upon BMW's recent $US15 million commitment. He emphasized the dedication of their two partners in achieving their goal of becoming the first European producers of both spodumene and hydroxide. With these milestones accomplished, Sage noted that subsequent steps will be streamlined.

" Over the next two quarters, our priority will be completing the revised Definitive Feasibility Study (DFS) for the newly separated projects and securing funding required to start construction.," Sage stated.

Following the formation of Arabian New Energy, the board plans to appoint a prominent ECPM firm to oversee the construction of the hydroxide plant. Funding for the project will be sourced domestically within Saudi Arabia.

Abdallah Obeikan, CEO of Obeikan Investment Group, expressed satisfaction with the agreement reached with European Lithium. He highlighted confidence in the partnership's potential to benefit all stakeholders involved.

"This collaboration brings together European Lithium's robust technical expertise and its affiliates with Obeikan's industrial knowledge and the robustness of Saudi Arabian financial markets," Obeikan stated.

He emphasized the strategic significance of this global partnership in advancing the goals of Vision 2030 and promoting the development of a new industry within the Kingdom of Saudi Arabia.