Vulcan Raises A$172m, Mobilises Drilling Rig, and Advances Lithium Production in Q1 2025
Vulcan Energy Resources has marked significant progress in Q1 2025 by achieving Strategic Project status under the EU Critical Raw Materials Act and producing Europe’s first fully integrated battery-quality lithium hydroxide monohydrate. The company advances drilling, financing, and commercial partnerships, positioning itself as a key player in Europe’s sustainable lithium supply chain.
- Awarded Strategic Project status under EU Critical Raw Materials Act
- Produced first fully integrated battery-quality lithium hydroxide monohydrate in Europe
- Mobilised V20 drilling rig to Schleidberg well site and completed 70 km 2D seismic survey with BASF
- Raised ~A$172 million through institutional placement and Share Purchase Plan
- Advanced financing discussions including €1bn German Raw Materials Fund participation
Strategic Recognition and Milestone Production
Vulcan Energy Resources Ltd (ASX: VUL) has accelerated its Phase One Lionheart Project with a series of landmark achievements during the quarter ending 31 March 2025. Most notably, the European Commission granted the project Strategic Project status under the Critical Raw Materials Act (CRMA), underscoring its critical role in securing Europe’s lithium supply chain amid global geopolitical tensions and tariff uncertainties.
Complementing this regulatory endorsement, Vulcan successfully produced the first battery-quality lithium hydroxide monohydrate (LHM) at its Central Lithium Electrolysis Optimisation Plant (CLEOP) in Frankfurt. This milestone marks the first fully integrated production of battery-grade LHM in Europe, from raw brine extraction to final product, positioning Vulcan as a pioneer in sustainable lithium manufacturing on the continent.
Operational Advances and Project Execution
Operationally, Vulcan mobilised its 2,500-horsepower V20 drilling rig to the Schleidberg well site near Landau, Germany, following extensive infrastructure preparations. The rig’s commissioning is underway, with drilling operations scheduled to commence in Q2 2025. Additionally, the company completed a 70-kilometre 2D seismic survey in partnership with BASF SE, targeting geothermal heat development in the Ludwigshafen region. These efforts support Vulcan’s integrated geothermal and lithium extraction strategy, which aims to power lithium production with renewable geothermal energy.
Further approvals were secured for the Lithium Extraction Plant (LEP) in Landau, clearing the way for construction of the integrated Geothermal and Lithium Extraction Plant (G-LEP). Vulcan also completed the acquisition of geox GmbH’s geothermal wells and renewable energy assets, consolidating upstream resources critical to its supply chain and local energy provision.
Financial Strength and Commercial Partnerships
On the financing front, Vulcan raised approximately A$172 million through a €100 million institutional placement and an A$8 million Share Purchase Plan, strengthening its balance sheet ahead of Phase One construction. The company is actively engaging with the €1 billion German Raw Materials Fund (RMF) to include government participation in project financing, adjusting its timeline to finalise agreements by the second half of 2025.
Commercially, Vulcan is negotiating a binding lithium hydroxide offtake agreement with a premium German automaker, following a mutual termination of its prior agreement with Renault Group. This new partnership is expected to secure a significant portion of Vulcan’s lithium sales volume over the next eight years, aligning with the company’s strategic focus on European battery supply chains.
Sustainability and Community Engagement
Vulcan’s commitment to sustainability is reflected in its ongoing renewable geothermal heat supply to EnergieSüdwest AG in Landau, supporting Germany’s decarbonisation goals. The company maintained its ESG Industry Top Rated status by Morningstar Sustainalytics, validating its strong environmental, social, and governance practices.
Community engagement remains a priority, with Vulcan hosting multiple public information events and educational visits to its geothermal facilities. The visit by German Chancellor Olaf Scholz to Vulcan’s lithium and geothermal plants further highlights the project’s strategic importance to Germany and Europe’s energy transition.
Governance and Future Outlook
Governance enhancements include the appointment of Group CFO Felicity Gooding as Executive Director and Angus Barker as Lead Independent Director and Deputy Chair, strengthening the board’s oversight as the company moves into full project execution.
Looking ahead, Vulcan aims to commence drilling new production wells, complete Phase One financing, start construction of lithium plants, and advance product qualification with offtake partners throughout 2025. The company’s integrated approach to lithium and renewable energy production positions it uniquely to meet Europe’s growing demand for sustainable battery materials.
Bottom Line?
Vulcan’s strategic EU recognition and operational breakthroughs set the stage for a pivotal year in Europe’s lithium and renewable energy landscape.
Questions in the middle?
- Will Vulcan secure final financing agreements including government participation by H2 2025?
- How will the new lithium offtake agreement with the premium German automaker impact Vulcan’s revenue profile?
- What are the implications of the geox GmbH acquisition for Vulcan’s upstream resource control and project timeline?
