Vulcan Energy has closed a €1.2bn financing package with a range of export credit agencies (ECAs) and banks to fund the first phase of a major lithium project in Germany.
Vulcan’s Lionheart project has an annual production target of 24,000 tonnes of lithium hydroxide monohydrate, enough to deliver batteries for 500,000 electric vehicles.
The first phase of the scheme secured a debt package from a consortium of 13 financial institutions, including ECAs from Denmark, France, Canada, Italy, and Australia, as well as the European Investment Bank, ABN Amro, Unicredit, Natixis, ING, BNP Paribas, KommunalKredit and OCBC.
Export Development Canada, Export Finance Australia and the Export and Investment Fund of Denmark (EIFO) provided direct lending of between €100mn and €250mn apiece, while Bpifrance and Italy’s Sace provided insurance cover for commercial lending of €373mn.
Other elements of the debt package include a commercial base facility and commercial standby facility.
Vulcan also agreed other sources of funding as part of an overall package totalling €2.2bn, the Sydney-listed company said in a regulatory filing.
They include €204mn in German government grants and a €133mn investment from a group of strategic investors including construction group Hochtief and Siemens Financial Services.
Lionheart is classed as a strategic project under the EU’s Critical Raw Materials Act and forms part of the bloc’s bid to lessen its reliance on China for the mining and processing of critical minerals.
The energy firm extracts lithium chloride from subterranean brine using recycled water and green energy at its Upper Rhine Valley brine field in southwestern Germany.
Vulcan will use the fresh funds to build a processing plant near Frankfurt, where extracted lithium will be converted into lithium hydroxide monohydrate for use in battery production for the automotive sector.
Production is expected to start in 2028 after a two-and-a-half-year construction period.
The project will also deliver 275GWh of renewable power and 560GWh of heat per year for local consumers, Vulcan said, over an estimated 30-year project life.
Cris Moreno, Vulcan’s managing director and chief executive, said: “A lighthouse project for Europe, Lionheart is set to redefine lithium production, delivering Europe’s first fully domestic and sustainable lithium value chain.
“It will also provide a clean and reliable source of renewable energy for local communities and industries in Germany’s Upper Rhine Valley.”
Vulcan has also signed long-term supply agreements with firms such as Glencore, global carmaker Stellantis, lithium-ion battery manufacturer LG Energy Solution and materials technology company Umicore.
It has offtake agreements for the first ten years of production with “European-focused” partners, Vulcan said.
Peter Boeskov, chief commercial officer at the Export and Investment Fund of Denmark, said: “Lionheart is a strategically important project which strengthens Europe’s supply chain and reduces its dependence on imports from China.
“It aligns with EIFO’s commitment to supporting green energy as well as European critical minerals independence. Lithium is essential for Europe’s energy and mobility transition, and the Lionheart Project provides Europe with a new sustainable source.”
