The key differentiator of Vulcan’s Phase One Lionheart project is that it will produce not only lithium, but also a “side salad” of renewable energy.

The extraction of lithium brine from Lionheart creates heat as a co-product.

The first phase of the project is targeting the production of 24,000 tonnes per annum of lithium hydroxide, enough for 500,000 electric vehicles per year, as well as 560 gigawatt hours of renewable heat, enough to power 90,000 homes, and 275GWh of renewable power.

Speaking at the Paydirt Critical Battery Minerals Conference in Perth this week, Vulcan founder and executive chairman Dr Francis Wedin said the project was already producing renewable power.

“We will produce cheap and renewable heat as of today,” he said.

Wedin said it was more like an oil and gas project than a mining project, with the company to use adsorption-type direct lithium extraction (A-DLE) from brines.

Given the restrictions on the export of Chinese DLE technology, Vulcan developed its own in-house, called VULSORB.

It makes Vulcan the only ASX-listed company with an in-house A-DLE technology division outside Rio Tinto.

Private company EAU Lithium, which ASX-listed Cosmos Exploration has an option to acquire, has a technology partnership agreement with Vulcan.

Synthetic brine testing is underway using the VULSORB technology, while EAU has sent bulk samples from its Bolivian projects to Germany for testing.

Once the brine is extracted, Vulcan produces a high-purity lithium chloride concentrate at its plant in Landau, before the concentrate is sent to the company’s Central Lithium Electrolysis Optimisation plant (CLEOP), about 100km away in Frankfurt.

In January, CLEOP started producing battery-quality lithium hydroxide monohydrate, a first for both Vulcan and Europe.

The product will be used in product qualification processes with the company’s European offtake partners.

Vulcan believes its projected cash costs of €4030 per tonne of lithium hydroxide will put it in the lowest quartile of global producers.

Strong backing

Vulcan counts Gina Rinehart’s Hancock Prospecting as a major shareholder with 6.5% of the company, second to only Wedin, who has an 8% stake.

Rinehart’s son John Hancock is also on the register.

The company also has offtake agreements with top tier customers Stellantis, Umicore, Renault, LG Energy Solution, Volkswagen, covering most of the first 10 years of lithium production.

Stellantis is also a major shareholder.

Vulcan, with a market capitalisation of around A$1 billion, has raised around €460 million to date, including A$164 million via a placement in December.

The company is now advancing the financing process for the €1.4 billion project.

“This is what’s consuming us on a daily basis,” Wedin said.

In December, Vulcan signed an agreement €879 million conditional debt commitment letter with Export Finance Australia and a commercial lending group of seven banks.

The company also received European Investment Bank board approval for up to €500 million and was awarded €100 million from the Federal Ministry of Economics and Climate Protection of Germany.

Vulcan is targeting the close of the financing process in the second half of this year.

“We’re now trying to usher this to the finish line,” Wedin said. “2025 is all about finishing that financing, helped by our partners and offtakers.”

In January, Canaccord Genuity analyst Tim Hoff said he expected Vulcan to attract a strategic partner this year.

“We have modelled this as a €400 million capital raise via a strategic stake at a premium of A$6.50/share,” he said.

Vulcan has bucked the trend for lithium companies, rising by more than 40% over the past year.

Its shares were trading at A$4.85 this week. Hoff has a price target of A$11.75.

Europe taking action

Wedin said the weaponisation of raw materials was starting to hit home in Europe, particularly since the announcement of US President Donald Trump’s “Liberation Day” tariffs.

“There’s a really strong push in Europe and Germany to gain some sort of resilience,” he said.

“After a lot of talk, we’re finally seeing tangible action to gain critical minerals independence.”

In late March, the Phase One Lionheart project was named as a strategic project under the European Commission’s Critical Raw Materials Act (CRMA).

Alongside the government support already received, the strategic project status could open up the potential for further government funding, including from the recently established €1 billion German Raw Materials Fund.

“It provides a lot more impetus to what we’re doing,” Wedin said.

“Europe is really starting to get going now. There’s a lot of tangible assistance that’s now coming in.”