Vulcan Energy Receives $186m in German Government Grants to Advance Lionheart Lithium Project

Vulcan Energy (ASX: VUL) has received $186 million in grants from two different governments in Germany to enable the Phase 1 development of its flagship Lionheart lithium project in the Upper Rhine Valley brine field, which runs along the country’s border with France.

The German federal government and the states of Rhineland-Palatinate and Hesse awarded the grants under the country’s clean lithium for battery cell production (Li4BAT) project.

Vulcan will apply funds toward establishing its geothermal lithium extraction plant (G-LEP) in Landau and lithium hydroxide capabilities at the central lithium plant (CLP) in Frankfurt.

Resilient Supply Chain

The Li4BAT program aims to help build a resilient critical raw materials supply chain across Europe to support the growing electric vehicle industry.

The grants will form part of Vulcan’s financing package for Lionheart, which includes a complementary $178 million grant for the project’s renewable heating component and a financing envelope of as much as $819 million approved by the European Investment Bank.

The funds are conditional on Vulcan completing overall Phase 1 financing by September and commencing construction of the project by January 2026.

The company also needs to finalise its ongoing negotiations for a €150m cornerstone Phase One Lionheart investment from the Raw Materials Fund by 31 March 2026.

Strong Support

“This is strong and tangible support from German federal and state governments that will enable Lionheart to supply sustainable, domestically-sourced lithium to the European battery EV markets,” Vulcan chief executive officer Cris Moreno said.

“Lithium is the lifeblood of the energy transition and is crucial to transitioning Europe’s auto industry into the electric age.”

“We look forward to providing further updates on the progress of the project, including planned completion of the overall financing package and start of construction, in the coming months.”

Integrated Business

Vulcan is building the world’s first carbon-neutral, integrated lithium and renewable energy business that aims to decarbonise the lithium supply chain for EVs and supply local communities with renewable heat and power.

Phase 1 of the project will seek to produce 24,000 tonnes per annum of lithium hydroxide, which is equivalent to 500,000 electric vehicles.

Vulcan is targeting key auto and battery makers in the European supply chain including its second-largest shareholder Stellantis, which acquired an 8% equity stake after committing to a $76 million strategic investment in June 2022.