Vulcan Energy Resources Ltd (ASX: VUL), which is backed by iron ore magnate Gina Rinehart, has just won a key approval for the construction of its lithium extraction plant in Germany.
The company said in a statement to the ASX that it had secured the permit to build the lithium extraction plant at its Phase One Lionheart Project in Landau, Germany.
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Dual energy and lithium project
The Lionheart project is a combined geothermal energy and lithium production project, with building permits for the 30-megawatt geothermal plant and electrical substation received in June.
The facility will extract hot geothermal brine from underground, with the heat to be used to generate electricity.
The lithium-rich brine will then be processed through the lithium extraction plant, before the brine is then re-injected underground.
Vulcan Managing Director Cris Moreno said it was an important milestone for the company.
Securing this permit means we are one step closer to producing battery-quality lithium products from the same geothermal brine that is used to produce renewable energy for local use. We are establishing a sustainable, domestic and cost-effective source of lithium for the European battery and automotive industries, supporting the EU's goal of reducing critical raw material dependencies.
Phase one of the Lionheart project is expected to have the capacity to produce 275 gigawatt-hours of power and 24,000 tonnes of lithium hydroxide monohydrate (LHM), enough to build 500,000 battery electric vehicles per year.
Building on recent progress
During the September quarter, the company upgraded the lithium brine resource at the project, increasing the amount of lithium contained by 76%.
The company also signed a number of supply contracts for infrastructure as well as an offtake agreement with global miner Glencore, which has agreed to take between 36,000 and 44,000 tonnes of LHM from Vulcan over an initial eight-year period.
Mr Moreno said at the time that several key milestones were achieved.
Successes on project execution preparation were pleasing with the central lithium plant permit now secured and approval to purchase the land at the site of our geothermal and lithium extraction plant granted. We also signed several major supply contracts … which is a credit to our team.
Mr Moreno said he expected the remainder of the year to be "transformative" for the company, as it aimed to finalise the financing package for Phase One.
Ms Rinehart's Hancock Prospecting owns a 6.5% stake in Vulcan Energy, which was valued at $1.57 billion at the close of trade on Friday.
Vulcan shares were 0.3% higher on Monday morning at $6.75.
