Borenius advised Outokumpu on a ten-year, USD 1.6 billion off-take agreement with Greenland Resources for critical raw material supply

We advised Outokumpu, the global leader in sustainable stainless steel, on a ten-year off-take agreement with Greenland Resources Inc. for the future supply of molybdenum, a strategically important raw material used in the production of specialty stainless steel, procured at competitive prices. The agreement encompasses approximately 8 million pounds of molybdenum per year, valued at approximately USD 160 million at current market prices, which represents roughly half of Outokumpu’s annual molybdenum requirement. At current market prices, the long-term supply of molybdenum oxide would represent a value of approximately USD 1.6 billion over ten years. The commencement of the off-take obligation is contingent upon the fulfilment of customary terms and conditions.

The off-take agreement supports Outokumpu’s efforts to further decarbonise and continue its long-term strategy for sustainable and cost-competitive value-chain integration. It ensures a stable supply of molybdenum for its European operations, thereby strengthening its position within advanced materials.

The strategic importance of this agreement is underscored by the fact that Europe is heavily reliant on imports for many critical raw materials, creating vulnerabilities due to geopolitical factors and supply chain disruptions. The cooperation with Greenland Resources strengthens Outokumpu’s supply chain of critical raw material and provides access to low-emission molybdenum from Greenland’s Malmbjerg project, situated in Greenland, at competitive prices, including a cap and a floor mechanism.

Outokumpu, based in Finland, is a world leader in stainless steel production and known for its commitment to sustainability and innovation. Outokumpu’s total raw material procurement is approximately EUR 3 billion annually. At the end of 2023, Outokumpu employed some 8,500 people in more than 30 countries. Outokumpu is listed on Nasdaq Helsinki.