Vulcan Energy secures $1.1bn to launch giant German lithium project

Phase one of the Lionheart project will target 24,000 tonnes of lithium hydroxide monohydrate, which is enough for 500,000 electric vehicle batteries per annum.

The mammoth $1.1bn equity raising by the Gina Rinehart-backed Vulcan Energy offered a lucrative payday for advisers working on the transaction, Morgan Stanley and Canaccord.

But what it also demonstrated is the urgency Europe is showing to secure critical mineral supply, with the Australian-listed company’s flagship asset based there.

Not only will Vulcan secure a huge pile of funds from its equity investors, but it is receiving $2.5bn worth of strategic support from German, other European and international government-backed institutions. This money will fund the first phase of Vulcan Energy’s Lionheart lithium and renewable energy project in the Upper Rhine Valley in Germany.

Only last week, the ASX-listed European Metals received a €360m ($637m) grant from the Czech government for its Cinovec Project in the Czech Republic.

The $1.4bn Vulcan Energy will start construction on the Lionheart project in the coming days.

Phase one of the Lionheart project will target 24,000 tonnes of lithium hydroxide monohydrate, which is enough for 500,000 electric vehicle batteries per annum.

The underwritten component of the equity raising comprises of a $245m placement, a $465m institutional entitlement offer and a $366m retail entitlement offer.

Shares were sold at a 34.7 per cent discount to the Vulcan closing price of $6.13 on December 2.

Offering $232m of cornerstone support for the placement is German construction group Hochtief, taking its Vulcan ownership to 15.7 per cent from 6.7 per cent.

Vulcan says the Lionheart project is intended to position Vulcan as a key enabler of Europe’s battery and EV value chain and a climate champion, delivering low-cost lithium and renewable energy from Europe for Europe.