Vulcan Energy Secures Major Funding for Groundbreaking Lithium Project

Vulcan Energy Resources has successfully locked in a multi-billion euro financing package, clearing the path for construction to begin on its flagship European lithium venture. The company's board gave the final investment decision on December 2, with site work commencing just three days later. This initiative, named the Lionheart project, is poised to establish the continent's first fully integrated, domestic source of lithium production, uniquely powered by renewable energy.

The total funding of €2.2 billion for the project's initial phase is structured across multiple sources. A syndicate of 13 financial institutions is providing €1.185 billion. This group includes seven commercial banks—among them BNP Paribas, ING, and UniCredit—alongside five export credit agencies from France, Canada, Australia, Denmark, and Italy.

Significant public support is also in place. The European Investment Bank (EIB) is contributing €250 million. The German government is providing grants worth €204 million, while the state-owned KfW Raw Materials Fund is investing a further €150 million for a 14% stake in Vulcan's German subsidiary. A separate consortium involving HOCHTIEF, Siemens Financial Services, and Demeter is injecting €133 million for a 15% share in the project company.

Vulcan itself will raise €528 million through a capital increase priced at €2.24 per share. Construction giant HOCHTIEF is acting as an anchor investor in this raise, committing a total of €169 million.

Project Timeline and Output

Construction, awarded to a joint venture of Sedgman and HOCHTIEF under a €72 million contract, is expected to take approximately two and a half years. The first phase involves building a lithium extraction plant in Landau and a central lithium plant in Frankfurt-Höchst.

Commercial operations are slated to begin in 2028. The facility is designed to have an operational life of around 30 years, with annual production targets set at:
* 24,000 tonnes of battery-grade lithium hydroxide monohydrate
* 275 GWh of renewable energy
* 560 GWh of heat for local consumers

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This lithium output capacity is sufficient for roughly 500,000 electric vehicle batteries per year, equating to an estimated 12% of Europe's projected lithium hydroxide demand in 2030.

Offtake Agreements and Strategic Status

Vulcan has already secured buyers for the entire output of its first decade of production. Key offtake partners include automotive giant Stellantis, LG Corp, Umicore, and Glencore. Approximately 72% of these contractually committed volumes are protected by either fixed-price or minimum-price agreements. Executive Chairman Francis Wedin noted in comments to Reuters that the agreed pricing is significantly above current spot market levels.

The European Union has designated the Lionheart project a strategic undertaking under the Critical Raw Materials Act. EIB Vice President Nicola Beer highlighted its pioneering nature, calling it "Europe's first project to combine direct lithium extraction with renewable energy generation."

Proprietary Technology and Next Steps

The project leverages Vulcan's proprietary VULSORB technology, which extracts lithium from geothermal brine while co-generating renewable heat and power. This method eliminates the need for evaporation ponds, thereby reducing land use. An optimization plant has been operational since April 2024, producing high-purity lithium chloride that is further processed into battery-grade material in Frankfurt.

Trading of the new shares from the institutional placement is scheduled to start on December 12, with shares from the retail investor offering expected to follow by the end of the month. With financing now secured, the company's focus shifts to project execution and maintaining the schedule toward the planned 2028 production start.