Vulcan Energy Resources Ltd (ASX: VUL) shares are catching the eye on Friday.
In morning trade, the lithium developer's shares are 10% to $5.49.
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Why is this ASX lithium stock jumping?
The catalyst for this has been the release of an announcement before the market open this morning.
According to the release, Vulcan Energy has signed a major contract with a consortium between Turboden and ROM Technik to develop, procure, and construct the commercial geothermal power plant near Landau Germany. This is part of the Phase One Lionheart Project.
Turboden is an Italian firm and part of Mitsubishi Heavy Industry. It specialises in the design, manufacture and maintenance of ORC systems both in Germany and globally. ORC systems produce baseload renewable energy, ensuring stability to the grid.
Fellow partner ROM Technik specialises in technical building equipment and installation services. It will be responsible for co-ordinating the respective contractors on the construction of the geothermal power plant.
The signing of the contract is a condition precedent to financing. Vulcan is aiming to finalise, together with additional project and financing agreements, in the second half of this year.
500,000 electric vehicles a year
The release notes that Lionheart will have the capacity to produce 275GWh of power and 24,000 tonnes of lithium hydroxide. This is enough for approximately 500,000 electric vehicles per year.
The ASX lithium stock advised that the contract includes the full scope of services required for the Engineering, Procurement and Construction (EPC) of its new phase one geothermal power plant and is on a fixed lump-sum turnkey basis with a value of ~110 million euros.
The geothermal power plant will utilise organic rankine cycle (ORC) technology in generating renewable power from Vulcan's geothermal brine. Management highlights that the renewable power is produced as a coproduct, alongside its lithium, which is also produced from the same brine source, at Vulcan's upstream Geothermal and Lithium Extraction Plant (G-LEP).
The ASX lithium stock's managing director and CEO, Cris Moreno, believes this is another milestone for the company. He commented:
The geothermal power plant is a key component of our Phase One operation. Securing the services of both Turboden and ROM Technik, who are both leaders in their respective fields, will underpin the construction of the geothermal power plant, and we are fully confident in their ability to execute having delivered similar type projects in Germany and globally.
This is yet another milestone in our aim to deliver a local, low-cost source of sustainable lithium for the European battery supply chain, with a co-product of renewable energy production. We look forward to working with both service providers in ultimately contributing to the Landau region's supply of climate-neutral energy.
