Vulcan Energy Launches Europe’s First Battery-Grade Lithium Production with €1.45bn Financing
Vulcan Energy has marked a pivotal quarter with major capital raises, strategic partnerships, and the commencement of Europe’s first fully integrated battery-quality lithium hydroxide production.
- Raised €164m via fully underwritten institutional placement and €8m through Share Purchase Plan
- Conditional debt commitment of €879m secured from Export Finance Australia and seven banks
- European Investment Bank board approved up to €500m participation pending final approvals
- Started lithium hydroxide production at downstream optimisation plant in Frankfurt
- Signed strategic partnership with BASF for renewable heat and lithium supply
Capital and Financing Milestones
Vulcan Energy Resources (ASX: VUL) has delivered a landmark quarterly report for the period ending 31 December 2024, underscoring its accelerating momentum in Europe’s renewable lithium sector. The company successfully completed a fully underwritten institutional placement raising €100 million (A$164 million), complemented by a Share Purchase Plan that added approximately €4.9 million (A$8 million). These capital injections bolster Vulcan’s balance sheet ahead of the critical Phase One Lionheart Project execution.
On the debt financing front, Vulcan secured a conditional commitment letter for €879 million (A$1.45 billion) from Export Finance Australia alongside a syndicate of seven commercial banks. This substantial financing package is a cornerstone for the estimated €1.5 billion to €1.6 billion project cost. Further strengthening the financing mix, the European Investment Bank (EIB) board approved its potential participation of up to €500 million (A$819 million), pending due diligence and final approvals, signaling strong institutional confidence in Vulcan’s integrated lithium and geothermal energy model.
Operational Breakthroughs and Strategic Partnerships
November 2024 marked a historic milestone with the official opening and start of lithium hydroxide production at Vulcan’s Central Lithium Electrolysis Optimisation Plant (CLEOP) in Frankfurt. This plant represents Europe’s first fully integrated production of battery-quality lithium hydroxide monohydrate (LHM) from geothermal brine, positioning Vulcan as a pioneer in sustainable lithium supply for the European electric vehicle market.
Strategic collaboration also advanced with BASF, one of the world’s largest chemical producers, through a partnership agreement to develop a renewable heat project supplying baseload heat to BASF’s Ludwigshafen site. This partnership not only aligns with Vulcan’s decarbonisation goals but also opens potential for a commercial lithium extraction plant within BASF’s global chemical complex, enhancing Vulcan’s footprint in the European industrial heartland.
Government Support and ESG Credentials
Vulcan’s HEAT4LANDAU Project received a €100 million (A$162 million) grant from the German Federal Ministry of Economics and Climate Protection and the European Recovery and Resilience Facility. This funding supports transformative decarbonisation efforts in district heating networks, underscoring Vulcan’s role in Europe’s energy transition.
On the environmental, social, and governance (ESG) front, Vulcan’s Green Financing Framework earned a Dark Green rating from S&P Global Ratings, the highest ever awarded to a metals and mining company globally, reflecting the company’s leadership in sustainable finance and project execution.
Governance and Project Readiness
Effective 1 January 2025, Vulcan implemented planned board changes with the appointment of Angus Barker as Lead Independent Director and Deputy Chair, and Felicity Gooding as Executive Director in addition to her CFO role. These appointments bring seasoned leadership to steer the company through its critical Phase One development.
Preparations for Phase One execution are well underway, with drilling rig mobilisation approved and well site construction progressing at Schleidberg. The company also secured an option agreement with the City of Landau for property critical to the integrated geothermal and lithium plant, reinforcing its strategic project footprint.
Managing Director Cris Moreno highlighted the quarter as a defining period, emphasizing the start of lithium hydroxide production and the robust financing achievements as key enablers for Vulcan’s growth trajectory in 2025 and beyond.
Bottom Line?
With robust financing secured and production underway, Vulcan Energy is poised to reshape Europe’s lithium supply landscape—next steps will test execution and market uptake.
Questions in the middle?
- How will Vulcan manage execution risks as Phase One moves into drilling and construction?
- What are the timelines and conditions for finalising EIB’s €500 million debt participation?
- How will the BASF partnership influence Vulcan’s commercial lithium production scale and timing?