The startup Vulcan Energy is coming up with a plan to produce lithium for electric car batteries Germany an important step further. On Friday, the company commissioned a demonstration plant that produces lithium hydroxide in the Frankfurt-Höchst industrial park. The white powder is required by battery cell producers. It is obtained from thermal water from the Upper Rhine Graben in Rhineland-Palatinate. Large-scale industrial production is scheduled to begin in 2027 – two years later than originally planned.
“The first sustainable lithium produced entirely in Europe from our two optimization plants is an important milestone for the company and crucial for the resilience of the battery value chain in Germany and Europe,” explained Vulcan boss Cris Moreno.
The special thing about Vulcan’s battery raw material is not only that it comes from Europe, while the leading manufacturers and processors have so far been in South America China sit. It is also more climate-friendly because the energy required for brine extraction is generated CO₂-free using geothermal heat and power plants. This technology is still in its infancy. So far, the light metal has been extracted from rock using a lot of fossil energy in mining.
“The financing process took longer than expected,” said Christian Freitag, Vulcan’s board member responsible for supply chain management, to the Reuters news agency. The financial needs of the German-Australian company, founded in 2018, now amount to 1.9 billion euros, including financing costs. The required funds should be secured in the first quarter. Vulcan will raise more than 600 million euros in equity from a handful of investors, Friday said. The remaining 1.3 billion euros will flow through loans from banks – including the European development bank EIB, which has promised half a billion euros.
Acceptance agreements with Volkswagen, Stellantis and Renault
Vulcan is about the purchase agreements with the car manufacturers Volkswagen, Stellantis and Renault, the battery producer LH energy and the cathode manufacturer Umicore have already sold out for the first ten years of production. In two years, an amount of 24,000 tons per year is to be delivered – enough for 500,000 electric car batteries. To achieve this, an extraction plant would have to be built in Landau, where a pilot plant currently extracts thermal water deep in the earth, and a larger production plant would have to be built in Höchst. Capacity is expected to increase twice more by 24,000 tons every two to three years.
According to Friday, the current slow transition to electric cars does not call the plans into question. “The need for our carbon-neutrally produced lithium at competitive prices remains high,” he said. The automotive industry knows very well that what we are currently seeing in terms of electric car demand in 2024 is not what we will see in 2027, 2028, 2029.” Price fluctuations also had little impact. Since peaking at more than $70 per kilogram, the price has fallen by 80 percent. Vulcan has agreed a range of minimum and maximum prices with buyers for more than half of the agreed quantity. “This means that even with extremely low lithium prices, which could be even lower than current ones, our project is still profitable.”
Independent of Asia
The European Union is pursuing the goal of only putting emission-free cars on the road from 2035 onwards. The continent also wants to become more independent of Asia across the entire supply chain. That’s why there are now many projects in Europe – most of them in the form of mining, such as the EU-funded project by the mining company Rio Tinto in Serbia. They face resistance from the public because of possible damage to the environment.
With deep geothermal energy, such as that used by Vulcan Energy, there is a risk of triggering earthquakes. A similar project in France caused cracks in houses in Alsace and Baden-Württemberg a few years ago. There are thorough risk assessments, assured Freitag. Vulcan sees itself as a pioneer who would be happy to imitate it in Europe: “It always takes someone to open the door and then there are a few others who also benefit from it.” In Australia, Vulcan Energy shares rose by almost 5 percent 4.93 Australian dollars.