Vulcan bags €2.2bn financing package for German lithium project
Vulcan Energy Resources said on Wednesday it had secured a financing package of €2.2-billion that would allow it to begin construction at its Lionheart lithium and renewable energy project in Germany this week.
The Australia-listed company will supply lithium for 10 years from 2028 to companies, including carmaker Stellantis, LG Corp, Umicore and Glencore, from the project, as well as provide renewable energy.
"The board has taken the final investment decision (FID), it's fully funded and we will be putting shovels in the ground on Friday," executive chair Francis Wedin told Reuters, noting strong support from European and Australian government-backed institutions for the project.
"It's a two-and-a-half-year build, so the clock starts now."
Vulcan will raise up to 603 million euros in equity, via institutional placement and entitlement offers, at a fixed price of 2.24 euros per new share, as part of the financing package.
The project has been backed by European and German government agencies, and a syndicate of 13 financial institutions comprising the European Investment Bank, five Export Credit Agencies and seven commercial banks.
Vulcan is "very positive" on the lithium market going forward despite the price downturn, Wedin said.
"There's been a deficit of new projects being FID-approved, so at some point that deficit is going to hit home," he said.
About 72% of its contracted volumes are covered by floor or fixed pricing for the first decade, providing downside protection, he said, with prices "well above the spot price."
The lithium explorer in July received 104 million euros in German government grants to produce clean lithium, as Berlin aims to boost electric vehicle output and reduce reliance on raw material imports.
Trading was halted on Wednesday in Vulcan shares, which have gained 14.6% so far this year.
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