Vulcan Energy Secures Major Funding Package for German Lithium Venture

Vulcan Energy Resources has successfully assembled the complete financial backing required for the first stage of its landmark lithium extraction project in Germany. A comprehensive €2.2 billion financing package now ensures the fully-funded status of Phase One of the company's Lionheart initiative. Trading of the first new shares from a related capital raise commenced on the Australian Securities Exchange today, involving approximately 178 million securities issued through an institutional placement and a subscription offer to existing major shareholders.

With all financing elements secured, Vulcan's board gave the final investment approval in early December, allowing construction activities to commence immediately. The funding structure is a multi-faceted arrangement drawing support from banking institutions, government bodies, and strategic investors.

The cornerstone of the package is a €1.185 billion debt facility provided by a consortium of thirteen financial institutions. This group includes the European Investment Bank, which is contributing €250 million, alongside five export credit agencies and seven commercial banks.

Government support adds a further €354 million. This comprises €204 million in non-repayable grants from the German federal government and the state of Rhineland-Palatinate, plus a €150 million equity investment from the KfW Raw Materials Fund. In exchange for its capital, the KfW fund will acquire a 14% stake in Vulcan's German operating subsidiary.

Strategic investors are also playing a key role. A consortium consisting of construction giant HOCHTIEF, Siemens Financial Services, and Demeter Partners is injecting €133 million. In return, they will hold 15% of the preferred shares in the project company. HOCHTIEF's participation is particularly notable; its commitment of €130 million could potentially increase its shareholding in Vulcan from the current 6.7% to a maximum of 15.7%.

The final component is approximately €603 million in equity raised from Vulcan's shareholders.

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Details of the Recent Equity Raise

In early December, the company closed a capital increase totaling roughly €398 million (A$710 million). New shares were priced at A$4.00 each, representing a 34.7% discount to the last closing price of A$6.13 prior to the announcement.

The institutional portion of this raise involved the issue of around 61 million new shares via a placement and an additional 116 million shares through an offer to existing large shareholders. Demand was reported from both current and new institutional investors. A separate retail offering remains open until December 23 and aims to secure a further €205 million. Shares from this retail tranche are expected to begin trading on December 31.

The Lionheart Project's Strategic Scope

Phase One of the Lionheart project, located in Germany's Upper Rhine Valley, is designed for an annual production capacity of 24,000 tonnes of lithium hydroxide. This output is estimated to be sufficient for the batteries of roughly 500,000 electric vehicles annually.

A defining feature of the project is its integrated, zero-carbon approach. It will concurrently generate up to 275 gigawatt-hours of electricity and 560 gigawatt-hours of thermal energy per year from geothermal sources. The construction phase is projected to take approximately two and a half years, with commercial production targeted for 2028.

The European Union has classified Lionheart as a Strategic Project under the Critical Raw Materials Act, underscoring the initiative's importance for the bloc's ambitions of raw material independence. Vulcan has already secured binding offtake agreements with several European automotive manufacturers and battery producers, which will absorb a significant portion of the planned future output.