Germany Backs First Lithium-Mining Project

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany's federal and state governments have approved 104 million euro (US$122 million) in funding for one of the world's first lithium operations with a net-zero carbon footprint.

The money will go to Vulcan Energy Resources (Perth, Australia) and its "Clean Lithium for Battery Cell Manufacturing" (Li4BAT) project in the Upper Rhine Valley Brine Field (URVBF), one of Europe's largest lithium resources. The project is vital to Germany and Europe, securing a homegrown source of lithium for electric vehicle (EV) batteries for an established car industry. Except for some hard-rock lithium operations in Portugal, there is no significant lithium production in Europe, which is almost totally reliant on imports from South America and China.

Vulcan's Rhine prospect includes 27.7 million tonnes of contained lithium carbonate equivalent (LCE), of which 4.16 million tons are to be developed as part of the Phase 1Lionheart area. The funding will go towards the construction of two commercial production facilities: a lithium extraction plant (LEP) for the extraction of lithium chloride in Landau and a central lithium plant (CLP) for further processing into lithium hydroxide monohydrate (LHM) in Frankfurt-Höchst. The facilities have the capacity to produce up to 24,000 tons of LHM annually, sufficient for the production of approximately 500,000 EV batteries per year. Industrial Info is tracking 12 Vulcan projects at the Ortenau and Taro leases at the URVBF, covering proposed lithium plants and geothermal power plants, which are worth in excess of US$1.3 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

"By supporting Vulcan Energy's investment projects in Hesse and Rhineland-Palatinate, we are helping to establish sustainable lithium production in Germany," said Stefan Rouenhoff, parliamentary state secretary at the Federal Ministry for Economic Affairs and Energy. "This reduces our dependency on raw materials and strengthens the resilience of our supply chains. That is a key prerequisite for the competitiveness of our economy."

Vulcan Chief Executive Officer Cris Moreno added: "This funding will enable us to provide sustainable, domestic lithium for the German and European electric vehicle industry with our project. This raw material is driving the energy transition and is crucial for the transition to electric mobility. We look forward to sharing further updates on the completion of project financing and the start of construction of our commercial production facilities in the coming months."

Vulcan expects to invest up to 690 million euro (US$803 million) in the project in total, including the new funding. The European Investment Bank (EIB) has provisionally approved up to 500 million euro (US$578 million) in potential investment for the project. Last year, Vulcan demonstrated with pilot projects that extraction and processing locally was possible. In January, it announced that it had produced the first battery quality LHM at its downstream optimisation plant by processing high purity lithium chloride concentrate extracted from brine at the upstream plant in Landau. "It is the first fully integrated, battery-quality LHM produced in Europe, from raw material to final product," the company stated. In 2022, carmaker Stellantis N.V. (Amsterdam, Netherlands) paid 50 million euro (US$53 million) to become the biggest shareholder in Vulcan with an 8% stake, becoming one of the first backers for the Upper Rhine Valley Brine Field (URVBF) project. For additional information, see July 5, 2022, article - Carmaker Stellantis Buys Stake in German Lithium Project.

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