Vulcan pushes back large-scale production date for German lithium plant to 2027

Vulcan Energy Resources

08/11/2024 15:48

FRANKFURT, Nov 8 (Reuters) - Start-up Vulcan Energy
 VUL.AX  will begin large-scale industrial production of lithium
hydroxide in Germany in 2027, two years later than originally
planned, the company said on Friday as it started operations at
a demonstration plant. 
    Vulcan started producing lithium chloride, an important
component in producing lithium hydroxide, at its upstream
extraction plant in Landau, Germany, in April.
    It is currently raising funds for its first large-scale
industrial plant with an aim of delivering an expected 24,000
tons of lithium hydroxide a year, equivalent to 500,000 electric
vehicles, from 2027.
    "The financing process has taken longer than expected,"
Christian Freitag, the Vulcan CEO responsible for supply chain
management, told Reuters.
    Vulcan's financial requirements now amount to 1.9 billion
euros ($2.04 billion), including financing costs, with the
required funds expected to be secured in the first quarter.
    The company will raise more than 600 million euros in equity
from a handful of investors, Freitag said, and the remaining 1.3
billion euros via loans from banks, including the European
development bank EIB, which has promised half a billion euros.
    Vulcan's production of the battery raw material will help
Germany cut dependency on lithium producers China and South
America. The energy it will use to extract lithium from brine in
underground reserves is simultaneously generated CO2-free using
geothermal power plants. 
    Lithium demand is forecast to surge later this decade from
growth in lithium-ion batteries used in electric vehicles.
    Vulcan, which is listed both in Australia and Frankfurt, has
already sold its first 10 years of production through purchase
deals with carmakers including Volkswagen  VOWG_p.DE ,
Stellantis  STLAM.MI  and Renault  RENA.PA .
    The company has already once postponed the start date for
large-scale production at its plant by a year to 2026, citing
supply chain delays.
    ($1 = 0.9292 euros)

 (Reporting by Ilona Wissenbach, Writing by Miranda Murray,
Editing by Jan Harvey)
 ((Miranda.Murray@thomsonreuters.com;))