Vulcan Energy set to produce Europe’s first locally sourced lithium chemicals
Special Report: The first lithium chemicals sourced from an entirely local value chain in Europe are ready to be produced via Vulcan Energy’s newly minted lithium extraction optimisation plant in Landau, Germany.
Vulcan Energy Resources (ASX: VUL) officially opened its Lithium Extraction Optimisation Plant (LEOP) on Thursday 23 November in a ceremony attended by local community, shareholders, politicians, strategic partners, and other industry representatives.
The ceremonial unveiling of the plant follows almost three years of testing and pilot lithium production. More than 10,000 hours of successful in-house pilot performance testing has been conducted to date, demonstrating high lithium recoveries and thousands of cycles of sorbent life with no degradation.
Material is sourced from the Upper Rhine Valley lithium brine field – Europe’s largest lithium resource – where Vulcan has proven the absorption-type direct lithium extraction (A-DLE) production process can be successfully applied.
The A-DLE method represents 10% of global lithium production today.
In what is also a world-first for the lithium industry, the renewable heat in the lithium brine resource allows the company to produce with a net zero carbon footprint and co-production of renewable energy.
The LEOP will serve as an optimisation facility and training ground for Vulcan’s production team, whilst the proposed Phase One commercial plant is constructed and commissioned over the next 2.5 years.
Vulcan reportedly invested €40 million to get the LEOP up and running.
The opening of the LEOP is timely given the EU reached a resolution and agreement on the Critical Raw Materials Act just last week, with lithium listed as the top priority for the battery electric vehicle industry.
The EU is targeting zero emissions from 100% of vehicles by 2035. This means a 57-fold increase in lithium demand over the coming years.
Vulcan’s Zero Carbon lithium project represents the first developed local supply of lithium on the European continent. Once Phase One commercial production commences, the company is expected to produce enough lithium hydroxide for 500,000 battery electric vehicles, as well as providing renewable heating to local communities and generating thousands of direct and indirect energy transition jobs.
“Vulcan and its Zero Carbon lithium business is driving new standards of sustainability in the lithium industry, whilst being at the forefront of creating a new, local-supplied lithium industry for battery electric vehicles in Europe,” Vulcan managing director Cris Moreno said.
“Our LEOP plant is ready to start production. This is not just an achievement for Vulcan; it’s a step towards Germany, and more broadly Europe, securing the lithium it needs to help its auto industry survive and thrive in the electric age, without compromising on ethical or sustainability standards.”
The EU is also targeting at least 40% of material processing and refinement to be carried out within its borders.
Financing for Phase One has commenced. Last week Vulcan reported a ~€100 million reduction in capex to develop its Zero Carbon lithium project as part of the outcomes of a bridging study which the company delivered to help secure an EPCM contractor for the next stage of project execution.
Vulcan expects to produce 24,000tpa of lithium hydroxide from the now almost €1.4 billion Phase One operations.
Opex also declined to an estimated €4,022/t which represents one of the lowest on the industry cost curve.
Vulcan has already secured lithium offtake agreements with the likes of Stellantis, Volkswagen, Renault, Umicore and LG as part of its ambition to deliver a “competitive and sustainable” battery industry across the entire European value chain.
This article was developed in collaboration with Vulcan Energy Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.