Vulcan Energy signs geothermal project agreement with car maker Stellantis

Vulcan Energy Resources (ASX: VUL) and global car maker Stellantis NV have signed an agreement for the first phase of a geothermal project aimed at decarbonising the energy mix of Stellantis’ Mulhouse industrial site in France.

The agreement represents the first joint project in France for the potential use of geothermal renewable energy to decarbonise and localise the energy supply for Stellantis’ European operations.

Stellantis’ decarbonisation strategy includes the achievement of carbon net zero emissions by 2038 with a 50% reduction by the end of this decade.

Project phases

The first phase of the project — located at the southernmost extent of Vulcan’s lithium focus area in the Upper Rhine Valley — will see Vulcan complete a pre-feasibility study (PFS) for the construction of geothermal renewable energy assets for the Mulhouse site as well as the potential for lithium production.

The next phase will focus on more advanced studies and development.

Under the terms of the agreement, Stellantis will fund 50% of the project’s development and both parties will also seek public funding.

Subject to a positive PFS, Vulcan and Stellantis aim to develop the project on a 50:50 joint venture basis.

Mulhouse is the manufacturing site for Stellantis’ vehicles which include models by Citroën and Peugeot.

Based on current assumptions, the planned renewable energy project could provide a significant portion of the site’s annual energy needs commencing in 2026.

Core mission

Vulcan managing director Dr Francis Wedin said the agreement supports the company’s core mission of decarbonisation.

“Stellantis is our largest lithium customer and one of our major shareholders we are here to support the decarbonisation of its operations in Europe,” he said.

“While we remain focused on the execution of our integrated Phase One commercial lithium and renewable energy project in the Upper Rhine Valley brine field, this project is a complementary opportunity to expand our future development pipeline into the French region of the valley.”

Geothermal initiatives

In November, Vulcan announced a number of initiatives to expand its geothermal renewable energy and Zero Carbon Lithium businesses into France and specifically the north-eastern region of Alsace, which accounts for one third of the Upper Rhine Graben.

Vulcan has applied over the Mulhouse area for an exclusive lithium and geothermal license to secure another 480 square kilometres of development area within the Upper Rhine Graben Valley brine field.

Vulcan’s Zero Carbon Lithium project is aligned with the creation of the French Mineral Resources Observatory which aims to analyse the nation’s critical resources and provide recommendations for public investment supported by the recently-launched $3.29 billion French Critical Raw Materials Fund.