Vulcan Energy Resources Ltd (ASX: VUL) shares are avoiding the market weakness on Thursday.
In morning trade, the ASX lithium stock is up almost 15% to $3.28.
Why is this ASX lithium stock jumping?
Investors have been buying the lithium developer's shares after it released an update on its Lithium Extraction Optimisation Plant (LEOP) in Landau, Germany.
According to the release, the company has started production of the first Lithium Chloride (LiCl) product at the LEOP.
Management notes that this represents the first lithium chemicals domestically produced from a local source in Europe for the European market.
The good news is that LEOP is showing strong early results with consistently over 90% (up to 95%) lithium extraction efficiency from its Adsorption-type Direct Lithium Extraction (A-DLE) unit. This replicates what the ASX lithium stock saw in its lab and pilot plant operations. Importantly, it is in line with its commercial plant expectations and financing model.
What is the LEOP?
Vulcan has spent 40 million euros on LEOP. It is an optimisation, operational training, and product qualification testing facility. Its aim is to enable operational readiness for when the Phase One commercial facility is completed.
The next step will be its conversion to a battery-grade lithium chemical in Vulcan's downstream optimisation plant. The LiCl product produced from LEOP will be transported to Höchst Industrial Park Frankfurt, where Vulcan is currently completing its Central LEOP. This facility will convert the LiCl into battery grade Lithium Hydroxide Monohydrate (LHM).
Looking further ahead, once Phase One commercial production commences, Vulcan estimates that its integrated renewable energy and Zero Carbon Lithium business will produce enough lithium for approximately 500,000 electric vehicles.
'Significant milestone'
The ASX lithium stock's CEO, Cris Moreno, was very pleased with the news. He commented:
This significant milestone marks a pivotal moment in Vulcan's journey towards revolutionising domestic lithium raw material supply for Europe's Battery industry. Vulcan's LEOP facility is equipped with world-leading technology designed to showcase the efficiency of our A-DLE process and environmental benefits, whilst training our commercial production team in a pre-commercial environment as we build the Phase One commercial plant.
It is encouraging to see LEOP deliver extraction efficiency in line with our expectations. I would like to thank our determined project execution and operations team for getting us to this landmark. We look forward to providing further updates on our Central Lithium Electrolysis Optimisation Plant (CLEOP) as we aim to produce Europe's first fully integrated lithium battery chemicals from our own domestic resource, and also to providing updates on Phase One of the Zero Carbon Lithium Project, including financing, in the coming months.
