Vulcan’s Ludwig PFS Delivers Stronger Returns and Lower Costs

Project Ludwig Builds on Lionheart’s Blueprint

Vulcan Energy (ASX:VUL) has delivered a robust Preliminary Feasibility Study (PFS) for Project Ludwig, its next lithium and geothermal energy development in Germany’s Upper Rhine Valley Brine Field (URVBF). Located about 60km north of its flagship Lionheart project, Ludwig aims to replicate and improve upon Lionheart’s integrated geothermal-lithium model, targeting 21,100 tonnes per annum of battery-grade lithium carbonate alongside 3,125 GWh of renewable heat annually over a 30-year lifespan.

The PFS underscores Ludwig’s potential to generate stronger returns and lower capital intensity compared to Lionheart, with a post-tax net present value (NPV8) of €1.7 billion and an internal rate of return (IRR) of 20.2%. Capital expenditure is forecast at €1.26 billion (real 2026), about 15% less than Lionheart’s €1.48 billion, reflecting lessons learned, increased project maturity, and a simplified development concept.

Economics and Cost Position

Operating costs are expected to sit in the lowest industry quartile at €4,101 per tonne of lithium carbonate equivalent (LCE), comparable to Lionheart’s €4,077/t LCE. This cost advantage is driven by Ludwig’s naturally heated, low-impurity brine resource and Vulcan’s proprietary VULSORB® adsorption-based direct lithium extraction (A-DLE) technology, which has been bankable and de-risked through Lionheart’s development.

Capital intensity, measured as development CAPEX per tonne of lithium product, is estimated at €59,770/t Li₂CO₃ for Ludwig, roughly 15% lower than Lionheart’s €69,995/t LCE equivalent. The project’s integrated design combines lithium extraction and lithium carbonate conversion within a single facility, leveraging local renewable heat supply to reduce power generation needs and enhance capital efficiency.

Resource and Development Plan

Project Ludwig’s production target is underpinned by 1.25 million tonnes of indicated lithium mineral resources at 155 mg/L lithium concentration, representing a 91% increase from prior estimates, alongside a maiden geothermal resource estimate of 193 PJ indicated and 295 PJ inferred. The development plan includes 14 production and 14 injection wells across five well sites, connected by 16 km of pipelines to a central lithium production facility.

The project benefits from extensive geological, seismic, and well data accumulated over decades in the URVBF, supplemented by Vulcan’s own drilling and reservoir evaluation. The brine system and reservoir characteristics are materially similar to Lionheart, allowing direct application of proven technology, engineering, and permitting frameworks.

Strategic and Market Rationale

Lithium carbonate production at Ludwig complements Lionheart’s lithium hydroxide output, broadening Vulcan’s product suite to meet diverse battery chemistries, including lithium iron phosphate (LFP) used in low-cost electric vehicles and battery energy storage systems. Both projects share a lithium chloride intermediate platform, enabling flexible downstream processing aligned with evolving market demands.

The project aligns with European Union policies aiming to secure sustainable domestic supply chains for critical raw materials and decarbonise heating. Germany’s supportive regulatory environment and royalty exemptions for geothermal and lithium production further enhance Ludwig’s strategic positioning.

Funding and Next Steps

Vulcan is pursuing an asset-level financing strategy, seeking strategic minority equity partners while maintaining majority control. Final Investment Decision (FID) for Ludwig is contingent on successful Lionheart start-up, with staged funding planned to support appraisal, permitting, definitive feasibility studies, and commercial discussions including lithium and heat offtake agreements.

Upcoming milestones include 3D seismic acquisition, appraisal well drilling, DFS completion, and progressing commercial and funding arrangements. Vulcan’s integrated approach and operational experience from Lionheart provide a strong foundation to advance Ludwig efficiently.

While the PFS presents a compelling economic case, it is subject to the usual uncertainties of project development, including financing availability, regulatory approvals, and market conditions. The company cautions investors that further studies and funding are required to realise the project’s potential.