Danish sovereign wealth fund - the Export and Investment Fund of Denmark (EIFO) – has extended a €100m loan to Vulcan Energy, a German lithium supplier. The loan is part of a financing package for phase one of Vulcan Energy’s Lionheart Project – an integrated lithium supply chain in southwest Germany.
The project uses geothermal lithium extraction, a process that allows extraction to utilise recycled water and clean energy. The company says this ensures a point of differentiation – other methods of lithium extraction rely on energy-intensive mining and are relatively carbon intensive as a result.
“We are pleased with the participation of EIFO in the financing of our Lionheart Project, particularly given its focus on facilitating the global green transition”, said Cris Moreno, Vulcan Energy’s chief executive.
“ Lionheart is a lighthouse project that is set to deliver Europe’s first fully domestic and sustainable lithium value chain, and with EIFOs support, we now look forward to moving into the construction phase of the project.
“Lionheart is a lighthouse project that is set to deliver Europe’s first fully domestic and sustainable lithium value chain, and with EIFOs support, we now look forward to moving into the construction phase of the project”, Moreno adds.
The project has a total debt package of over €1bn involving the European banks such as Unicredit, ABN AMRO, ING, BNP Paribas, Natixis as well as the European Investment Bank.
Its credit worthiness is seemingly linked with its geopolitical value proposition. Classified as a ‘strategic project’ under the EU’s Critical Raw Materials Act, it is aimed at reducing Europe’s dependence on China for lithium – a critical input in technologies such as electric transport.
“Lionheart is a strategically important project which strengthens Europe’s supply chain and reduces its dependence on imports from China”, commented Peter Boeskov, EIFO’s chief commercial officer.
At the back of the project, Vulcan Energy will build a processing unit in Industriepark Höchst, a 460 hectare industrial site near Frankfurt. The unit will refine extracted lithium into lithium hydroxide monohydrate – an input for Europe’s carmakers.
The project has an expected annual supply capacity of 24000 tonnes of LHM, alongside 275GWh of renewable power and 560GWh of heat for local use.
Stellantis, which operates brands such as Jeep, Fiat, Opel and Puegeot, has signed a long-term supply agreement with Vulcan. The orderbook also includes Glencore, Umicore and South Korean battery maker LG Energy Solution.
“It aligns with EIFO’s commitment to supporting green energy as well as European critical minerals independence. Lithium is essential for Europe’s energy and mobility transition, and the Lionheart Project provides Europe with a new sustainable source”, Boeskov adds.
