Vulcan advances $3.9b lithium project
Vulcan Energy (ASX: VUL) has secured $3.9b [€2.2b] in funding for the development of its phase one Lionheart lithium and renewable energy project in Germany.
The funding will accelerate the construction of an integrated lithium and renewable energy project targeting production capacity of 24,000tpa of lithium hydroxide monohydrate — enough for 500,000 electric vehicle batteries.
Off the back of securing financing, the Vulcan board has reached a final investment decision (FID) and expects to commence project execution in the coming days.
Over its expected 30-year lifespan, the project will also produce a co-product of 275GWhpa of renewable power and 560GWhpa of heat for local consumers.
Vulcan Energy managing director and chief executive Cris Moreno says Lionheart, as Europe’s first fully domestic and sustainable lithium value chain, is set to redefine lithium production.
“It will also provide a clean and reliable source of renewable energy for local communities and industries in Germany’s Upper Rhine Valley,” he said.
“Securing this financing package and taking a positive FID is a significant achievement in the history of Vulcan Energy. It will allow the company to transition from development phase into execution phase with the construction of the commercial scale supply chain for Lionheart.”
As part of the financing package, Vulcan is also launching an institutional placement to raise an additional $1.08b [€603m]. Eligible shareholders will be offered a value of $832m [€465m] worth of shares.
Iron ore heavyweight Gina Rinehart is a major shareholder in Vulcan Energy, currently holding a 7.5% stake, and is expected to partake in the share placement.
Contracts awarded
Following successful financing, Vulcan has signed agreements with Sedgman and HOCHTIEF joint venture (SHJV) for engineering, procurement and construction management (EPCM) services at the project.
SHJV will provide end-to-end solutions for the $700m [€397m] lithium extraction plant and $600m [€337m] central lithium plant.
As part of the agreement, HOCHTIEF has agreed to invest $69m [€39m] in the Lionheart project and a subscription of up to $230m [€130m] in Vulcan shares.
HOCHTIEF chief executive Juan Santamaria says the project aligns with the company’s global capabilities in energy infrastructure.
“As a shareholder in Vulcan Energy, we are proud to support the delivery of this important project and to contribute the combined strengths of Sedgman and HOCHTIEF,” he said.
“Our expertise in mineral processing and infrastructure makes us ideal partners for a development of this scale and significance. This global collaboration reflects our unified commitment to innovation, sustainability and excellence in delivery.”
The Upper Rhine Valley Brine Field (URVBF) is the largest lithium resource in Europe and is co-located within a geothermal resource.
Traditionally, lithium is extracted from either hard rock mining or brines. Vulcan leverages the natural geology of the region — adapting existing, commercially proven technology to produce battery-quality lithium from naturally heated subsurface brine. The operations are carbon neutral and use zero fossil fuels in the production process.
Vulcan is utilising existing geothermal plants in the local area to utilise its energy producing assets. One such plant, the NatürLich Insheim, has been producing carbon neutral electricity for about 6500 households in the Southern Palatinate and has produced 234,000MWh since 2012.
The Lionheart project was awarded EU Strategic Project status under the Critical Raw Materials Act, recognising its transformative potential for Europe’s clean energy future and lithium independence.
Vulcan has received significant public funding support, including $360m [€204m] in grants from German Federal and State governments.
Offtake agreements have also been secured with leading European-focused customers in Europe’s battery value chain.