Vulcan Energy (ASX: VUL, FSE: VUL) has announced the completion of its Preliminary Feasibility Study (PFS) for Project Ludwig, marking a significant advancement in its lithium and geothermal energy production strategy in the Ludwigshafen region of Germany. This project is set to build on the successes and learnings from Vulcan’s first phase, Project Lionheart, and aims to establish an integrated lithium chemical and renewable heat production facility within the Upper Rhine Valley Brine Field (URVBF).
The PFS highlights robust economic metrics, projecting a pre-tax net present value (NPV8) of €2.6 billion and an internal rate of return (IRR) of 25.0% over a planned 30-year operational life. Notably, Project Ludwig is expected to produce 21,100 tonnes per annum (tpa) of battery-grade lithium carbonate (Li2CO3) while also generating 3,125 GWh per annum of renewable heat for both internal use and external sales. The capital expenditure (CAPEX) for the project is estimated at €1.26 billion, reflecting a 15% reduction in capital intensity compared to Project Lionheart, showcasing Vulcan’s commitment to capital efficiency and sustainable production practices.
The study indicates a significant increase in mineral resources, with indicated lithium resources rising from 655 kt LCE to 1,251 kt LCE, and inferred resources increasing from 2,128 kt LCE to 2,230 kt LCE. Additionally, a maiden geothermal resource estimate of 193 PJ has been established, further solidifying the project’s potential.
Vulcan’s Managing Director and CEO, Cris Moreno, expressed optimism about Project Ludwig, stating that it represents a strategic next step in the company’s phased development approach. The project aims to leverage Vulcan’s existing infrastructure and expertise gained from Lionheart, applying a proven integrated geothermal-lithium development model to enhance shareholder value and contribute to Europe’s critical raw materials supply chain.
The PFS was conducted with support from Worley and JordProxa, ensuring a comprehensive evaluation of the project’s technical and economic viability. As Vulcan prepares for a Final Investment Decision (FID) post-Lionheart production commencement, it is also pursuing an asset-level financing strategy to advance Project Ludwig, with strategic partner selection processes already underway. The project aligns with the European Union’s focus on securing sustainable domestic supply chains for critical raw materials, particularly lithium, as the demand for electric vehicles and battery storage continues to rise.
Project Ludwig not only aims to enhance Vulcan’s lithium production capabilities but also integrates renewable geothermal heat generation, positioning the company as a key player in the transition to a sustainable energy future in Europe.
As the world pivots towards renewable energy and electric vehicles, one critical material has emerged as the linchpin of this transformation: lithium. This soft, silvery metal powers the batteries that drive electric cars, store renewable energy, and fuel the technologies of tomorrow. Yet Europe – the continent that ignited the green energy revolution – finds itself in an unexpected position: dangerously dependent on distant suppliers for a resource it urgently needs. The stakes are high, and Europe’s response could reshape global supply chains for decades to come.
The Lithium Imperative: Why This Element Matters
Clean technologies are revolutionising global economies. Solar panels harness the sun’s energy, wind turbines spin on hillsides, and electric vehicles replace combustion engines on roads worldwide. Behind each of these innovations lies lithium, the critical raw material that makes energy storage possible.
The scale of Europe’s ambition is staggering. The continent has committed to becoming carbon neutral by 2050 – a target that requires unprecedented quantities of lithium. According to projections, Europe’s demand for lithium could increase more than 20-fold by mid-century compared to current levels. This surge in demand reflects the sheer volume of batteries needed for electric vehicles, renewable energy storage systems, and grid stabilisation.
However, this explosive growth in demand has created a crisis of supply. Global prices for lithium have become highly volatile, swinging wildly with market sentiment and geopolitical tensions. For Europe to achieve its climate goals, it must solve a fundamental challenge: how to secure access to lithium when other countries have already locked in their supply chains?
Understanding Critical Raw Materials
The concept of “critical raw materials” emerged gradually in European policy circles. In 2011, the European Commission adopted its first list of 14 materials and material groups that merited close monitoring. Every three years, regulators revisited this list as global circumstances shifted.
The turning point came around 2019. Critical raw materials – once relegated to technical spreadsheets in Brussels – suddenly became a political priority of the highest order. The timing was significant: by 2020, lithium was added to the critical raw materials list just as Europe was launching its most ambitious climate initiative yet.
Modern economies run on raw materials. But some resources are so essential to maintain and so risky to secure that their absence could cripple entire industries. These are the materials that now define strategic competition in the 21st century.
The European Green Deal: Ambition Meets Reality
The European Green Deal represented a transformative vision: to reconcile Europe’s economy with its planet. Launched with the promise of turning the transition to a climate-neutral economy into Europe’s “next engine of growth,” the initiative encompassed everything from renewable energy investments to algorithmic innovations.
But the Green Deal revealed an uncomfortable truth: building clean technology at scale requires enormous quantities of raw materials. To power the continent’s clean energy future, Europe needs substantial amounts of lithium, copper, cobalt, and rare earth elements. The irony became starkly apparent – Europe, the champion of climate action, barely produces most of these materials itself.
Lithium exemplifies this predicament. While Europe excels in many sectors, lithium mining and processing remain almost entirely absent from the continent. Currently, Europe accounts for less than 0.1% of global lithium mine production, making it almost entirely dependent on imports.
The Global Lithium Landscape: Who Holds the Power?
Understanding Europe’s vulnerability requires examining the global lithium supply chain. Three countries dominate upstream production, each controlling different segments of the market.
Australia leads in hard rock mining, shipping most of the world’s spodumene concentrate – concentrated lithium extracted from mining ore. Chile dominates the production of lithium carbonate through massive evaporation ponds in the Atacama Desert, where vast salt flats are transformed into lithium repositories. And China, perhaps most significantly, controls approximately 70% of global battery-grade lithium hydroxide refining – the processed form essential for electric vehicle batteries and energy storage systems.
This concentration creates dangerous dependencies. When one country controls such a large portion of a critical supply chain, geopolitical risks multiply. Supply disruptions, trade disputes, or policy changes in any one nation can reverberate across the entire global economy.
For years, Europe overlooked an obvious solution: its own lithium deposits. Deep beneath European soil lie resources that were long considered economically unviable or technically challenging to extract. But as competition for lithium intensified, Europe began reconsidering these deposits. New extraction methods and new mine projects – ones that experts believe could cut Europe’s lithium imports by half – suddenly moved from the margins to the centre of strategic planning.
In December 2025, Cris Moreno, Managing Director and CEO of Vulcan Energy, announced a historic moment for the continent: comprehensive financing to fully fund the construction of Project Lionheart. This facility represents more than just another mining project – it embodies Europe’s determination to reshape its relationship with critical raw materials.
Located in Germany’s Palatinate region, Lionheart sits atop Europe’s largest lithium resource: a vast underground reservoir of lithium-rich, hot geothermal brine. The project’s brilliance lies not merely in the resource beneath the ground, but in how it extracts that resource.
Innovation in Extraction
The Lionheart process represents a significant leap forward in sustainable lithium production. Rather than simply pumping brine and abandoning it, Vulcan Energy operates an elegant closed-loop system:
Geothermal Energy Extraction: Hot brine is pumped to the surface, and the thermal energy is harvested as a renewable energy product.
Heat Distribution: This renewable heat feeds into local district heating grids, providing genuine utility beyond lithium extraction.
Lithium Concentration: Only after energy extraction does the lithium separation process begin. The brine passes through extraction columns where lithium is concentrated into a 40% lithium chloride concentrate.
Brine Reinjection: Crucially, the brine is re-injected into the reservoir, creating a closed-loop system with minimal waste.
Final Processing: The lithium chloride concentrate travels to downstream facilities where green power converts it into battery-quality lithium hydroxide suitable for electric vehicle batteries.
This process is revolutionary because it achieves dual benefits: generating renewable energy while extracting lithium, all with a minimal environmental footprint. When fully operational by 2028, Lionheart will produce 24,000 tonnes of battery-grade lithium annually – enough to power approximately half a million electric vehicles per year.
Europe’s Broader Resilience Strategy
Project Lionheart represents one crucial piece of Europe’s larger strategic puzzle. The continent’s approach to critical raw materials extends far beyond a single project or even domestic extraction.
Regional Cooperation
The financing structure of Lionheart exemplifies European cooperation. Germany’s raw materials fund acted as a minority investor, attracting additional equity investors to the project. Simultaneously, the European Investment Bank provided a substantial debt portion, demonstrating how public and private capital can align around strategic objectives.
Industrial Partnerships
Companies like Umicore, a Belgian battery materials leader and one of Europe’s largest battery players, have become off-takers for Lionheart’s lithium. Umicore’s commitment reflects three compelling reasons for a European supply chain:
Cost Competitiveness: Local sourcing reduces transportation costs and improves margin efficiency in the battery supply chain.
Geopolitical Risk Reduction: Diversified, local supply chains insulate Europe from political disruptions in distant suppliers.
Sustainable Sourcing: A European supply chain enables transparent oversight of environmental and labor standards, ensuring low-carbon, responsibly sourced lithium.
International Partnerships
Europe also recognizes that complete autonomy in raw materials is neither achievable nor necessary. Instead, the strategy emphasizes risk management through diversification. The European Investment Bank, for example, provides technical assistance to a lithium mining project in Namibia, creating secured supply chains for European manufacturers while supporting development in Africa.
The Critical Raw Materials Act: Policy Framework for Action
The turning point in European policy came with the Critical Raw Materials Act, which entered into force in 2024. Built on decades of analysis starting with the original 14-material list from 2011, this legislation translates strategic thinking into legal reality.
The Act’s core principle is straightforward yet powerful: reduce dependency to build resilience and competitiveness. Specifically, the regulation states that Europe should not rely on any single supplier for more than 65% of any critical raw material.
To operationalise this vision, the European Commission designated 47 strategic projects across the EU, with 18 specifically focused on lithium. These projects receive concrete benefits:
Accelerated Permitting: Regulatory timelines are compressed, allowing faster project development.
Improved Financing Access: Projects gain preferential access to European investment capital.
Comprehensive Scope: Initiatives span the entire value chain – extraction, processing, recycling and substitution technologies.
Project Lionheart stands as one of these designated strategic projects, recognized as “the first green mine in Europe.” The European Commission has committed to ramping up support for critical raw materials to €2 billion annually, with additional funding rounds already underway.
Impact on Europe’s Electric Vehicle Revolution
The timing of Lionheart’s development aligns perfectly with Europe’s electric vehicle boom. In 2025 alone, close to 1.9 million fully electric cars were sold across the EU—a figure that reflects the continent’s genuine shift away from internal combustion engines.
Each of these vehicles requires a battery, and each battery requires lithium. Without securing domestic or closely-partnered sources of lithium, Europe risks becoming a captive consumer, dependent on suppliers who may not prioritize European interests.
By providing 24,000 tonnes of battery-grade lithium annually, Lionheart removes this vulnerability. The lithium produced can be woven directly into European battery supply chains, powering the next generation of electric vehicles manufactured in German, French and Swedish factories.
Lessons in Strategic Resilience
Europe’s approach to lithium offers important lessons in strategic thinking for the 21st century:
First, diversification matters. Rather than seeking 100% autonomy – an impossible goal – Europe embraces multiple sources: domestic extraction, international partnerships and investments in processing capabilities.
Second, policy must align with industrial realities. The Critical Raw Materials Act did not emerge from theoretical exercises; it reflected genuine business needs articulated by manufacturers and investors. Government policy created conditions that entrepreneurs could seize.
Third, innovation becomes strategic. Lionheart’s success depends on novel extraction technologies that previous generations dismissed as uneconomical. As climate urgency mounts, what was once marginal becomes central.
Fourth, finance follows frameworks. Once the European Commission established strategic designations and committed public capital, private investors followed. The project attracted equity investors, bank financing and international development partners because policy created certainty.
Looking Forward: Momentum Building
The momentum is undeniable. Projects are breaking ground across the continent. Financing deals are taking shape. The second call for critical raw materials projects has closed, with the pipeline full of new initiatives spanning extraction, processing, and recycling.
Recycling deserves particular attention as an emerging opportunity. As electric vehicles reach end-of-life, their batteries represent not waste but resources. Recovering lithium, cobalt, and other materials from spent batteries can significantly reduce dependence on virgin extraction while creating new industrial capabilities within Europe.
Conclusion: The Green Supply Chain Revolution
The clean energy transition requires more than renewable power and efficient vehicles. It requires secure, sustainable supply chains for the materials that make this transition possible. For decades, Europe outsourced this responsibility, concentrating on technology and consumer markets while others controlled raw materials.
The lithium story represents Europe’s course correction. Through Project Lionheart and initiatives like it, Europe is building a different future: one where clean technology and responsible sourcing go hand in hand, where geopolitical resilience aligns with climate commitments, and where a continent leads not just in environmental vision but in strategic execution.
With €2 billion annually supporting critical raw materials development, with the first green mine in Europe approaching completion, and with companies like Umicore securing local supply for their batteries, Europe is gaining genuine momentum. The clean tech era will be built on critical raw materials, and increasingly, those materials will have a European origin.
This is not just about lithium. It is about whether Europe can translate its climate ambitions into economic reality – and whether it can build the resilient, sustainable supply chains that future generations will depend upon.
About This Documentary
This article is based on a documentary-style video produced by the European Investment Bank Group (EIB Group) as part of a new series exploring the topics driving Europe’s biggest conversations. The EIB Group is actively supporting Europe’s transition to a competitive, resource-secure future through strategic investments in critical raw materials and clean technology infrastructure.
To stay competitive globally and strengthen its tech leadership, Europe is investing in the resources needed for the technologies of tomorrow. Critical raw materials, especially lithium, are key to powering this transition. The documentary features interviews with key industry and policy leaders shaping Europe’s lithium strategy.
Featured Contributors
The video includes insights from industry and policy experts who are driving Europe’s critical raw materials agenda:
Cris Moreno, Managing Director and Chief Executive Officer of Vulcan Energy, discussing the innovative geothermal extraction methods at Project Lionheart
Francis Wedin, Founder and Executive Chair of Vulcan Energy, sharing the strategic vision behind Europe’s first green lithium mine
Dr. Jan Klasen, Director of the KfW German Raw Materials Fund, explaining how public investment catalyses private sector participation in strategic projects
Stephan Jannis, Chief Operating Officer of Battery Cathode Materials at Umicore, detailing why European battery manufacturers are prioritising local lithium supply chains
These contributions highlight the collaborative effort between private enterprises, government institutions and development banks working to secure Europe’s raw materials future.
More episodes in this documentary series are available on the EIB Group’s YouTube channel, exploring additional topics central to Europe’s economic and environmental transformation.
Germany is planning to increase the firepower of its national raw materials fund by as much as 50% to €1.5 billion, as Chancellor Friedrich Merz’s government moves to accelerate the diversification of critical mineral supply chains away from Chinese dominance and expand the vehicle’s potential scope toward a broader sovereign wealth fund.
Chancellor Merz’s coalition has agreed after months of internal wrangling to raise the fund’s cash resources by between €300 million and €500 million from 2027, according to people familiar with the matter. The fund, managed by state-owned lender KfW and forming part of Germany’s broader Germany Fund, takes equity stakes in and issues state guarantees for raw materials projects globally. Officials from both the finance and economy ministries confirmed the government intended to increase the fund’s capacity without providing further detail.
The agreement resolved a dispute between the two ministries over how much risk the state should assume in projects that frequently carry high default probabilities. Officials ultimately agreed that increasing the capital base would allow risks to be spread across a broader portfolio and enable the issuance of more guarantees per investment.
Coalition discussions also addressed the possibility of expanding the fund beyond commodities from 2028 onward to encompass domestic security, defence and infrastructure projects including power grids — or converting it into a full sovereign wealth fund. No agreement has been reached on that broader question and negotiations are continuing.
The fund has so far supported only two projects: a €150 million commitment to Vulcan Energy’s lithium extraction venture in Germany, which helped unlock approximately €2.2 billion in total investment, and up to €50 million for Arafura Rare Earths’ rare earth project in Australia. At least two additional investments are expected before the end of the year.
The additional funding requires parliamentary approval as part of the 2027 budget process in July and could still change. Officials considered exempting such investments from Germany’s constitutional borrowing cap on national security grounds, as has been done for defence spending, but that approach was shelved due to legal and constitutional obstacles. Fund resources are already treated outside the debt brake because they are booked through KfW as financial transactions.
Questions remain about the fund’s adequacy relative to its ambitions. Support is currently capped at roughly €150 million per project, even as the broader aim is to catalyse as much as €100 billion in investment.
Vulcan Energy Resources has begun construction on its Lionheart lithium processing facility outside Frankfurt, marking a significant milestone for a project that has become one of the most strategically significant critical minerals investments in Europe as the continent scrambles to reduce dependence on Chinese supply chains and cope with a second major energy shock in four years.
The first stage of Lionheart, backed by Gina Rinehart and due for completion in 2028, will produce 24,000 tonnes per year of lithium hydroxide monohydrate — sufficient to supply batteries for around 500,000 electric vehicles annually. The project’s process is more chemical than conventional mining: hot, briny water is pumped from underground reservoirs in Landau, approximately two hours from Frankfurt, transported to the processing centre and subjected to electrolysis to extract lithium. The geothermal heat from the same water provides an additional energy stream that offsets much of the production cost and emissions.
It is that energy advantage that Vulcan chief executive Cris Moreno describes as Lionheart’s competitive edge. “When you look at most lithium-like supply chains, with the biggest cost of production, the one single factor is energy,” Moreno said. “That energy in that brine effectively gives us all the energy we need to develop the entire process, so we’re not buying energy” — allowing the company to compete on cost against Chinese producers despite operating in one of the world’s most expensive labour markets.
The project has attracted a striking roster of institutional and strategic backers, reflecting its importance to European supply chain policy. The German government has invested €150 million through its Raw Materials Fund administered by KfW, which has also taken a €50 million equity stake in Arafura Rare Earths, another Australian critical minerals company. The European Investment Bank has emerged as Lionheart’s largest lender, committing €250 million. Stellantis, the world’s fifth-largest automaker, holds a stake in the project. KfW’s head of equity investments Jan Klasen noted the development bank has shifted its critical minerals approach from debt financing to direct equity participation, describing critical minerals as “a scarce resource” that warranted the government deploying its most powerful tools.
The war in Iran — which has inflicted a second major energy shock on European consumers in little more than four years after Russia’s invasion of Ukraine — has only intensified the urgency. The EU-Australia free trade agreement, recently concluded, removes all tariffs on Australian mineral exports to the EU and prohibits dual pricing structures. Brussels has also unveiled its RESourceEU plan targeting €3 billion in mobilised investment over twelve months for projects prioritising materials for magnets, batteries and defence.
Analysts and policymakers are careful to note, however, that domestic production alone cannot solve Europe’s supply challenge. “Even if Europe develops more of its own mining, refining, processing and recycling, it will almost certainly continue to source a substantial share of critical materials from abroad,” said Petya Barzilska of the European Initiative for Energy Security, who argued that Europe had not necessarily been slower than other regions but had simply built its economic model around efficiency rather than resilience — a trade-off that now requires urgent correction.
ASX-listed Vulcan Energy has secured a key regulatory milestone for its Lionheart project, receiving a lithium production licence in Germany’s Upper Rhine Valley Brine Field.
The licence, granted in the state of Rhineland-Palatinate, is the first of its kind issued in the region. Known as LiThermEx, it covers Vulcan’s Insheim geothermal production area, where renewable heat and electricity are already being generated.
The permit has been awarded for an initial six-year period, with the company planning to extend it in line with the project’s targeted 30-year operational life.
⚡ Lithium meets geothermal power Lionheart is not a typical mining project. It blends lithium extraction with geothermal energy production, creating a hybrid model where hot underground brines are used both to generate renewable energy and extract lithium.
The project is designed to produce around 24000 tonnes per year of lithium hydroxide monohydrate — a key battery material used in electric vehicles — while simultaneously supplying electricity and heat to local communities.
CEO Cris Moreno described the licence as a major step forward.
“Securing the first lithium production licence within the Lionheart project marks another important milestone,” he said, adding that the project supports Europe’s ambition to build a fully domestic lithium supply chain powered by renewable energy.
💶 De-risked and funded The licence further de-risks the project, which is already fully financed and under construction following a €2.2 billion funding package completed in December.
Vulcan expects additional production licences to be granted across the broader project area as development progresses.
🧭 Strategic timing With Europe racing to secure battery raw materials and reduce dependence on external suppliers, projects like Lionheart sit at the crossroads of energy transition and resource security.
Production is currently targeted to begin in 2028 — when lithium demand is expected to be even more electrified, quite literally.
Vulcan Energy has begun construction on its flagship Project Lionheart, officially laying the foundation stone for the combined geothermal and lithium extraction plant (G-LEP) in Landau, Germany. The ceremony, attended by European Investment Bank Vice-President Nicola Beer and other senior officials, follows the company securing a €2.2 billion (A$3.9 billion) financing package to fully fund Phase One of the development.
Phase One Lionheart will deliver an integrated lithium and renewable energy project in the Upper Rhine Valley, targeting annual production of 24 000 t of lithium hydroxide monohydrate — enough for roughly 500 000 electric vehicle batteries — alongside 275 GWh of renewable electricity and 560 GWh of renewable heat for local consumers. The project has an expected operational life of about 30 years.
The G-LEP facility is central to Vulcan’s plan to produce carbon-neutral lithium using deep geothermal brine, while also supplying long-term renewable district heating to the City of Landau. Executives described the groundbreaking as a major milestone for European critical raw material security and the region’s clean-energy transition.
CEO Cris Moreno said the launch signalled strong momentum for Europe’s efforts to build domestic lithium supply chains and reduce reliance on imports. He added that Vulcan would now focus on advancing construction of the G-LEP and delivering climate-friendly lithium and renewable heat to the region.
Vulcan Energy has secured a $2.56 billion financing package to build what is set to become Europe’s largest lithium production project, marking a major step forward for the region’s electric-vehicle supply chain. The funding will enable construction of the Lionheart lithium project in Germany to begin immediately, after multiple years of delays linked to fluctuating lithium prices and weakened investor appetite.
The Australia-listed company — backed by mining magnate Gina Rinehart — plans to produce around 24,000 tonnes of lithium hydroxide annually during the project’s first decade, enough to supply battery material for approximately 500,000 electric vehicles per year. The financing package is one of the largest ever assembled for a European critical minerals project and includes support from the European Investment Bank, German and EU government agencies, five export credit agencies, and seven commercial banks.
As part of the package, Vulcan will raise up to €603 million in equity at a fixed price of €2.24 per share. The company has already secured long-term supply agreements with Stellantis, Umicore, and Glencore, with roughly 90% of the first decade of production already contracted, many of them either at fixed prices or under price-floor and price-ceiling structures.
Executive chair Francis Wedin confirmed that the board has taken a final investment decision, telling Reuters: “It’s fully funded and we will be putting shovels in the ground on Friday.”
Vulcan previously targeted first production in 2023, later shifting the date to 2025. The revised timeline now points to 2028. Earlier this year, the company ended its long-standing supply agreement with Renault to “free up” volumes for other buyers, while Stellantis remains both a major customer and one of Vulcan’s largest shareholders.
Lithium prices have dropped sharply since their peak above $70,000 per tonne in 2023, with lithium carbonate trading just below $10,000 per tonne at the end of October, according to Benchmark Mineral Intelligence — a decline that has challenged new project financing across the sector. Vulcan’s ability to secure such a substantial funding package is therefore considered a significant milestone for European battery-material independence.
Vulcan Energy Resources, the German-Australian company pioneering geothermal lithium production in Europe, has received construction approval for its commercial Lithium Extraction Plant (LEP) in Landau, Germany, marking a key milestone toward establishing Europe’s first carbon-neutral lithium supply chain.
The City of Landau granted the permit for the facility in the D12 industrial zone, complementing previously approved construction permits for the site’s ORC geothermal power plant and 110/20 kV substation. According to Vulcan, it now holds all necessary permits to construct its combined geothermal and lithium extraction plant (G-LEP) in Landau.
In the project’s first phase, Vulcan plans to produce several thousand tonnes of lithium chloride, which will be transported to Frankfurt-Höchst for further conversion into battery-grade lithium hydroxide monohydrate (LHM). Once fully operational, annual production is expected to reach 24,000 tonnes of LHM — enough to supply approximately 500,000 electric vehicles per year.
The company’s lithium extraction process uses geothermal brine from the Upper Rhine Valley, home to Europe’s largest combined geothermal and lithium resource. Vulcan’s technology captures geothermal heat for district heating and renewable electricity generation, while extracting lithium chloride from cooled brine before reinjecting it underground. The company notes that the entire operation will be “carbon neutral and fossil fuel-free over its life cycle.”
Vulcan has already tested the process at pilot scale in Landau and Höchst. In April 2024, the company’s Lithium Extraction Optimisation Plant (LEOP) successfully produced the first lithium chloride from geothermal brine, later refined into battery-grade lithium hydroxide at the Central Lithium Electrolysis Optimisation Plant (CLEOP) in Höchst.
The upcoming commercial-scale LEP will be built later this year, contingent on the completion of the €690 million financing package for both Landau and Höchst facilities. The German federal government and the states of Rhineland-Palatinate and Hesse have pledged €103.6 million in funding through the EU’s Temporary Crisis and Transition Framework (TCTF) under the “Resilience and Sustainability of the Battery Cell Manufacturing Ecosystem” program.
In March 2025, the European Union designated Vulcan’s Landau facility as one of 47 strategic projects under the Critical Raw Materials Act (CRMA).
To secure final financing, Vulcan is leveraging offtake agreements with several major customers. Its latest supply deal, signed with Glencore, covers 36,000–44,000 tonnes of LHM over eight years. The company has also revised earlier agreements with Umicore (23,000 tonnes over six years), LG Energy Solution (31,000 tonnes over six years), and Stellantis (128,000 tonnes over ten years).
While construction will begin soon, deliveries are now expected later than initially planned. Once operational, Vulcan’s German facilities will play a central role in Europe’s battery supply chain, reducing dependence on imported lithium and advancing the EU’s green industrial strategy.
Vulcan Energy Resources has announced a major supply agreement with mining and commodities giant Glencore, under which it will deliver 36,000 to 44,000 tonnes of lithium hydroxide monohydrate from its Lionheart Project over an initial eight-year period.
The deal represents roughly 20% of Vulcan’s planned output from the Lionheart Project during that timeframe and marks a key milestone for the company’s Phase One project financing.
The agreement with Glencore adds to Vulcan’s growing roster of high-profile partners, which already includes Stellantis, Umicore, and LG Energy Solution. Vulcan said the Glencore deal will be the final offtake contract needed for its first project phase, while negotiations with additional European automakers are ongoing.
“Vulcan has now achieved a good mix of offtake partners for Phase One lithium production: an automaker, a battery maker, a cathode manufacturer, and a commodities trader, all with a strong European focus,” said Cris Moreno, CEO and managing director of Vulcan Energy.
Located on the French-German border, the Lionheart Project is regarded as Europe’s largest lithium resource. Vulcan’s development strategy focuses on producing climate-neutral lithium to support the region’s fast-growing electric vehicle and battery industries.
German-Australian start-up Vulcan Energy Resources has been awarded €104 million in public funding to advance its clean lithium production project in Germany, the company announced on Tuesday. The funding comes from the federal government and the states of Rhineland-Palatinate and Hesse, and is part of Berlin’s broader strategy to boost electric vehicle (EV) manufacturing and reduce dependency on foreign raw material imports.
The grants will support Vulcan’s €690 million investment in a geothermal-powered lithium extraction and refining facility. The project includes a plant in Landau, where lithium chloride will be extracted from geothermal brines, and a conversion plant near Frankfurt to produce lithium hydroxide — a vital input for EV battery production.
The company aims to commission its first large-scale industrial plant by the end of 2026, with a projected annual output of 24,000 tonnes of lithium hydroxide. This volume would be sufficient to power approximately 500,000 EVs per year, according to Vulcan.
Germany currently relies heavily on lithium imports from countries such as Australia, Argentina, Chile, and China. However, a recent study by the Federal Institute for Geosciences and Natural Resources and the Fraunhofer IEG suggests the country has enough lithium reserves to meet domestic demand for decades.
Germany’s lithium demand is expected to hit 170,000 tonnes annually by 2030, driven by a sharp rise in battery production needs. Economy Ministry State Secretary Stefan Rouenhoff emphasized the importance of the project, stating: “In times of increasing geopolitical challenges, it is necessary to intensify efforts to open up alternative sources of raw materials for our domestic economy.”
The €104 million in grants will begin disbursement on October 1, spread over a 36-month period. The federal states of Rhineland-Palatinate and Hesse will each co-finance approximately 30% of the total support package.
