It has been a huge month for Vulcan Energy Resources (ASX: VUL) here in Germany with 3 significant value inflection points for the company.
Investors have responded positively with the share price up 39% so far for November 2024.
Opening of the Central Lithium Electrolysis Optimisation Plant (CLEOP)
On the 8th of November Vulcan Energy announced start of production of its Central Lithium Electrolysis Optimisation Plant (CLEOP) at the Industrial Park Höchst, Frankfurt.
This plant is producing Europe's first sustainable and entirely domestically produced supply chain from resource to battery-grade lithium. This milestone represents a crucial step forward for Germany and Europe's battery supply chain resilience.
The Australian Ambassador to Germany, Natasha Smith, commented “Vulcan’s CLEOP is an example of Australia and Germany working together to find innovative solutions toward a sustainable future and I’m proud to be here to help celebrate the opening of the plant.”
The Prime Minister of the German state of Hessen also stated “Germany and Europe must reduce their dependence on Chinese lithium sources and ensure a secure supply of battery raw materials. Vulcan’s optimisation plant will make a decisive contribution towards this.”
The CLEOP will be used to optimise operating processes, product quality testing, and train Vulcan’s operating personnel in preparation for the start of commercial production. Phase One of Project Lionheart, Vulcan will produce around 24,000 tonnes of sustainable lithium annually – enough to produce around 500,000 EV batteries.
The Phase One upstream and downstream plants will exclude fossil fuels in both the extraction and processing of lithium, ensuring the process has the lowest carbon footprint for any global lithium production.
Award of €100 million in funding from BMWK
On 12th November, Vulcan Energy announced the awarding of €100m (A$162m) from the German Federal Ministry of Economics and Climate Protection (BMWK) and the European Recovery and Resilience Facility via the German Recovery and Resilience Plan (the BEW Funding) for its HEAT4LANDAU Project.
The BEW funding will be distributed to Vulcan through €22 million in 2026 and €78 million in 2027.
The HEAT4LANDAU Project is a part of Vulcan’s Phase One Lionheart Project and comprises of infrastructure necessary for 255MW of renewable geothermal heat generation, transport, and delivery to support Landau’s transition to sustainable and renewable district heating starting in 2026.
The project is a critical part of Vulcan's Phase One Lionheart Project – aiming for a 24,000 metric tons of lithium hydroxide production capacity per year to strengthen Europe's green lithium supply chain.
The German Recovery and Resilience Plan funding programme is one of the several grants under the German national government and European Commission initiatives for which Vulcan has applied.
Partnership with BASF
On the 20th of November, Vulcan Energy announced its partnership with BASF to develop a renewable geothermal heat project that will deliver affordable baseload heat to their global headquarters, the world's largest integrated chemical complex, in Ludwigshafen.
This partnership not only supports the potential decarbonisation of BASF’s site operations but also has the potential to extend district heating to nearby cities, benefiting local communities.
In addition to providing renewable heat, Vulcan plans to produce sustainable lithium for the German and European battery and automotive industries as part of the project.
The geothermally heated water in the Upper Rhine Graben boasts a high concentration of this light metal, which is used to produce lithium-ion batteries for applications such as smartphones, laptops, and electric cars.
BASF would first use the hot thermal water to generate steam, Vulcan would then extract lithium using a resource-efficient process known as adsorption-type direct lithium extraction (A-DLE).
The two partners are currently examining the possibility of building a lithium extraction plant at BASF’s site later.
This partnership represents a major milestone in Vulcan’s efforts to decarbonise European industry and paves the way for expanding geothermal energy production across the Upper Rhine Valley.
If the project is successful, Vulcan and BASF say the surrounding cities of Frankenthal and Ludwigshafen will also benefit from the sustainable heat. These cities are also participating in the necessary seismic survey.
With a potential output of 300 megawatts of thermal energy, the BASF site in Ludwigshafen could produce around four million tons of the energy source that is so important for the chemical industry every year – without the use of fossil fuels.
In this case, around 800,000 tons of CO2 emissions would be avoided. According to BASF, this would be a significant contribution to reducing greenhouse gas emissions at the main plant in Ludwigshafen. Initial measurements are planned to investigate the geothermal conditions in a sub-region of the Upper Rhine Graben.
The start of initial exploration is planned for the beginning of 2025.
Vulcan Energy Resources (ASX: VUL) is traded on the ASX and on the main board of the Frankfurt Stock Exchange (FSE: VUL) and all main German exchanges including Tradegate, Gettex, Berlin, Munich and Stuttgart.
The Q4 2024 Vulcan Energy Presentation can be downloaded here