Vulcan Energy Resources (ASX: VUL) is a lithium extraction and renewable energy production company with a strong focus on technological innovation in lithium extraction.
The company recently announced their VULSORB technology which is a significant advancement in lithium extraction offering superior extraction rates at a reduced water consumption rate and at lower operating temperatures.
They also outlined their Lionheart project aiming for sustainable lithium extraction located in the Upper Rhine Valley Brine Field. The company has secured many partnerships including with automakers such as Volkswagen, continues to invest in new technologies and has ambitious growth plans for their projects.
Acquisition of Geox
On April 2nd, Vulcan outlined the details of their Lionheart project in a Corporate Presentation for Q2 2025, on April 7th the company announced that they have completed an agreement signed in September 2024 for the acquisition of Geox GmbH. Geox’s acquired assets are to be used as a part of Vulcan’s Phase One for the Lionheart Project.
The completion of this deal involved a payment of €3.3M on the 7th of April, with an additional €11.03M to be paid before the 31st of October 2025 with 5% interest on this outstanding amount.
Geox GmbH
Geox’s major assets include geothermal wells, renewable energy generation assets, and geothermal and lithium licenses around Landau, Germany. These assets are set to be integrated into Vulcan Energy’s current projects.
The acquisition also includes a €100m grant from the German Federal Government for the renewable heating component. The renewable heat supply operations are scheduled to commence next week in Landau.
Geox GmbH’s assets are strategically located at the same site as Vulcan’s upstream Lithium Extraction Optimisation Plant (LEOP) and planned Geothermal and Lithium Extraction Plant (G-LEP). The company estimates these assets will contribute approximately 20% of Phase One upstream brine production for both geothermal renewable energy and lithium production.
Vulcan plans to dismantle Geox’s existing power plant and expand brine production under its Geothermal and Lithium Extraction Plant (G-LEP). The project aligns with Vulcan’s goal to produce carbon-neutral lithium for European electric vehicle batteries.
Lionheart Project Phase One & Beyond
Phase One of the project is targeting annual lithium hydroxide monohydrate production of 24,000tpa per annum to supply ~500,000 electric vehicles, the project also aims to produce 560 GWh of renewable heat and 275 GWh of renewable power.
The products in this project include high purity lithium chloride (LiCl), lithium hydroxide monohydrate (LHM), lithium carbonate (LC) and lithium metal. Vulcan has also secured various sources of financing for Phase One amounting to €1.541Bn, this funding will support the development and expansion of the project, ensuring its success and sustainability.
Vulcan holds 17 granted licenses in the Upper Rhine Valley, covering a total secured area of 2,234 km². The company plans to develop these license areas in a phased approach. Following Phase One, Phase Two and additional phases are planned for step-out areas.
The Lionheart Project includes plans for a single upstream surface facility for geothermal and lithium extraction operations, which will be supplied by multi-well pads. This project focuses on the core of the field, including existing production wells. Subsequent phases are intended to fully leverage the extensive license area that Vulcan has secured.
Materials Sector & Lithium Market
The Materials sector has faced significant challenges over the past year, experiencing a decline of 18.31%. This downward trend continued over the past month, with the sector dropping an additional 11.99%. Despite these recent struggles, the sector has shown some improvement over the past five years.
However, the progress has been minimal, indicating that the sector is still grappling with various issues.
In addition to the overall performance of the Materials sector, the lithium market has also seen a decline under pressure from oversupply. Over the past year, the price of lithium has decreased by 35.47%, and it has dropped by 3.26% over the past month. This decline is significant, especially considering that lithium prices peaked at $597,500 on November 7th, 2022, but have since fallen to $72,600.
The market is also under geopolitical pressure as U.S. tariffs on Chinese lithium imports have created supply chain disruptions. These tariffs have led to increased costs for lithium producers and manufacturers, impacting the overall market dynamics. Tensions between the U.S. and China have further complicated trade relations, making it challenging for companies to secure a stable supply of lithium.
Moreover, the global push for electric vehicles has intensified the demand for lithium, putting additional pressure on the market. As countries strive to meet their climate goals, the demand for lithium-ion batteries, which are essential for EVs, continues to rise placing pressure on lithium producers.
These market conditions present a challenging landscape for companies like Vulcan Energy, which are focused on growth and value creation. To navigate these economic challenges, Vulcan Energy is leveraging its investments in innovation and research, asset acquisition, and significant growth efforts.