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25/06/2024
Mining News

Vulcan Energy’s Zero Carbon Lithium Project gains momentum with European Investment Bank’s financial backing

Vulcan Energy Resources has received a significant vote of confidence for its lithium development endeavors, as the European Investment Bank (EIB) is poised to extend financial support to the German-based project.

Following thorough preliminary due diligence, the EIB has elevated Vulcan’s Phase One Zero Carbon Lithium Project to the “under appraisal” stage, indicating its potential suitability for up to $825 million in proposed financing. Vulcan’s Managing Director and CEO, Cris Moreno, expressed appreciation for the EIB’s backing, noting that it complements the ongoing debt funding discussions with prominent export credit agencies and international banks.

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“We welcome the support of the EIB. This is a strong and tangible signal of confidence at the European level for the Zero Carbon Lithium project and of its capability to enable a secure, domestic lithium supply chain for electric vehicle batteries for Europe,” said Mr. Moreno.

The progress in the EIB’s financial appraisal is seen as a positive stride in the sequence of Vulcan’s debt and project-level equity financing for the initial phase of the project. The project is anticipated to contribute significantly to carbon avoidance in the electric vehicle (EV) supply chain in the coming years.

As the lending arm of the European Union, the EIB, being one of the largest climate finance providers, aligns with Europe’s goals to reduce net greenhouse gas emissions by 55% by 2030 and achieve no net emissions of greenhouse gases by 2050.

Mr. Moreno highlighted that Vulcan has initiated its debt and project-level equity financing process, supported by BNP Paribas. This follows encouraging signals from commercial banks, development banks, and government-backed export credit agencies in 2023. The indications included a $200 million non-binding letter of support from Export Finance Australia and strong Export Credit Agency support from Canada, Italy, and France.

Vulcan is at the forefront of developing the world’s first integrated renewable energy and zero-carbon lithium project in the Upper Rhine Valley. The project aims to decarbonize the lithium supply chain for electric vehicles and provide renewable heat and power to local communities. In its initial phase, the project targets the production of 24,000 tonnes per annum of lithium hydroxide, equivalent to powering 500,000 electric vehicles. Vulcan is actively engaging with key players in the European auto and battery supply chain, including its second-largest shareholder, Stellantis.

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