Australia’s Vulcan Energy Resources plans the production of zero-emission lithium in Europe after obtaining positive results in its pre-feasibility studies for a facility powered by geothermal energy.
Vulcan Energy Resources has been investigating the possibility of producing emission-free lithium at a project in the German Upper Rhine Valley. The company plans to pair the lithium production facility with a geothermal power project, powering the facility with zero-emission electricity.
The company said it would be possible to produce a quality lithium hydroxide chemical for batteries at the proposed facility and that it would seek to tap into the emerging European market for lithium-ion batteries and electric vehicles.
The feasibility study found that the planned EUR 1.74 billion facility could produce up to 40,000 tonnes of lithium hydroxide each year, a usable ingredient for battery production, and would seek to tap into a 1.12 million tonnes carbonate equivalent reservoir from lithium in Germany, the largest in Europe.
The company describes the lithium concentration in geothermal brine among the highest in the world, or actually the highest together with the Salton Sea area in California/ U.S., another hot spot for lithium-geothermal extraction plants.
The production facility would be combined with 5 geothermal power plants with a combined 74 MW geothermal electricity generating capacity, which would extract heat from the lithium deposit itself. The power plant would allow the project to take advantage of a reliable supply of electricity without emissions that will also benefit from attractive subsidies (power fees).
The feasibility study showed that the company could achieve an expected pre-tax internal rate of return of up to 26 percent, a positive result that drove the value of the company’s shares up.
Lithium producers have benefited from the growing market for battery storage and electric vehicles. Europe is currently the fastest growing market for electric vehicles, and the market will accelerate further with the plans of Tesla’s ‘gigafactory’ in Berlin, as well as the push from major German automakers into the market for electric vehicles, including Daimler and Volkswagen .
Vulcan’s European lithium production ambitions are likely to be well received by battery makers in the region, with around 80 percent of the world market currently controlled by Chinese producers. Local production would help address supply chain and environmental concerns.