Geothermal lithium is the new buzzword in the net zero conversation, driven by players like Vulcan Energy Resources (ASX:VUL) and its zero carbon lithium project in Germany’s Upper Rhine Valley.

Basically, the company is aiming to produce a carbon negative lithium product by pumping deep geothermal brines to surface and using the excess geothermal energy to power its lithium chemical process – as well as exporting additional power to the grid.

Vulcan managing director Dr Francis Wedin said it’s a much more environmentally friendly process than hard rock lithium production which has quite a high carbon footprint.

“It’s almost undoing the good that electric vehicles are achieving,” he said.

“And by the time the lithium arrives in your Tesla, it’s been around the world a couple of times.

“So, the supply chain isn’t ideal, and that’s another factor behind the carbon footprint.

“Electric vehicles are still a better idea with hard rock lithium than fossil fuel vehicles, but we want to decarbonise the lithium supply chain.”

Right on the doorstep of EV markets

It’s worth noting that company is on the doorstep of the European EV market which is the world’s largest EV market with around 1.4 million sales last year – and the potential to hit around 13.3 million by 2030.

“Effectively, we’re aiming to extract and refine a battery chemical, and do the whole process within 60km of our end customers in the automotive space,” Dr Wedin said.

“And that transport can be fully electrified and would have essentially zero footprint – which is really attractive to our customers.

“We know that lithium is very much in the sights of the European Commission, they’re want to be 80% self-sufficient in lithium supply domestically by 2025, but currently, it’s 0% and their lithium demand is growing exponentially.

“There’s a very strong push from customers and from governments to have a local supply of lithium so I think our strategic location is definitely an advantage.”

Offtake agreements prove customers want zero carbon

Dr Wedin also thinks that other players will look into geothermal lithium options,

“We think this is the way to go in lithium extraction, and we’re not alone now,” he said.

“Geothermal lithium is being increasingly recognised as the next big wave of lithium supply.

“We think it can be done more widely, w’ve demonstrated that this is viable, and we’ve demonstrated that this is what the customers want – because we’ve already signed offtake agreements with Renault and LG.

“I think now people will start to search for these areas and I think you’ll start to see more and more come onstream.”

Why aren’t more places around the world rich in geothermal lithium?

Dr Wedin said most geothermal brines are actually not lithium-rich.

“If you look at places around the world with a lot of geothermal activity such as Japan, and Iceland, they typically have very low lithium grades in the brine,” he said.

“And in some parts of the world, you get geothermal brines with very high lithium grades, but they don’t have the third quality you need, which is the flow rate.

“You need sort of a natural productivity, which comes especially from the rocks’ porosity, and permeability.

“There need to be sufficient faults and fractures in the rock to allow that brine to come up to the surface to be able to produce geothermal lithium.

“If you have those three key ingredients – heat, lithium and flow rate – then you get something that is potentially both a source of renewable energy and a source of lithium.”

The company is currently working on its definitive feasibility study (DFS) for the project.


Not the only ASX listed player in the game

Pan Asia Metals (ASX:PAM) is another company looking into geothermal lithium and managing director Paul Lock said its Kata Thong prospect in Thailand is similar to Cornish Lithium’s United Downs Deep geothermal project in the UK.

“The project sits in the Southeast Asian tin tungsten belt which runs from Myanmar through Thailand and Malaysia, and about 40% of the world’s tin now comes from there,” he said.

“And in this area up through peninsula Thailand there’s a lot of geothermal heated rocks.

“So, when we looked at what Vulcan’s doing, and we had a closer look at our belt where some of these granites which are rich in tin and tungsten and lithium, overlap with these geothermal areas.”

Essentially, one of the project’s geothermal fields abuts granite which is very rich in lithium – and the company expects that the fluids will be rich in lithium too.

Primed to meet demands of Asian EV manufacturers

Just like Vulcan is on the doorstep of Europe, Lock said PAM is well-placed to cater to Asian battery and EV manufacturers.

“Like Vulcan we’re located very close to a large manufacturing hub and we’re in a country which is pushing green solutions in the policy environment,” he said.

“Where we’re located in Thailand, it’s the fourth largest car producer in Asia, and the largest in Southeast Asia.

“There’s a massive policy push there to produce EVs and batteries and there are over 10 car manufacturers there which intend to produce EVs – including the likes of Mercedes and BMW.

“And some Chinese auto and battery makers are considering Thailand to manufacture batteries, in part because of the tensions between China and the US.”

But it’s not enough to meet demand

Currently, hard rock lithium meets about 60% of the global demand for lithium, so even if these geothermal projects get up and running, they’re probably not going to cater for a huge slice of the market.

“Spodumene and brine will basically fill most of the demand,” Lock said.

“What we and Vulcan are doing will deliver a better product, but it’s not going to meet global demand.”

Lock said the company has lodged special prospecting licence applications for Kata Thong, but it considers the geothermal opportunity complementary to its Reung Kiet lithium project where it’s planning to release a maiden mineral resource estimate in November.



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