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German lithium project moves ahead in boost for Europe's EV sector / Photo: Kirill KUDRYAVTSEV - AFP
NYSE - LSE
German lithium project moves ahead in boost for Europe's EV sector
Australia's Vulcan Energy said Wednesday it will soon start building a German lithium production project that will provide enough of the metal for half a million electric car batteries a year.
The group said it had secured a 2.2 billion euro ($2.5 billion) financing package that will allow it to go ahead with developing its Lionheart project, in Germany's Upper Rhine Valley.
Previously the project had been in a pilot phase but development is set to get underway in the coming days, with commercial lithium production targeted from 2028, said Vulcan.
The initiative will produce a key component in the lithium-ion batteries widely used in electric vehicles, and the news comes as Europe is racing to secure its own supplies of critical materials.
"Lionheart is set to redefine lithium production, delivering Europe's first fully domestic and sustainable lithium value chain," said Vulcan's CEO Cris Moreno.
The project involves extracting brine, or salty water, from geothermal reservoirs and then sending it for processing into lithium hydroxide, the raw material that goes into batteries.
The initiative, which also includes a renewable energy and heat plant that will supply local communities, is backed by German government grants.
"Germany and Australia are sending a strong signal for a more resilient and strategic supply of raw materials," said German Economy Minister Katherina Reiche.
The news comes as the EU was set Wednesday to release a plan to reduce its dependence on China for critical raw materials, through steps including speeding up joint purchasing and accelerating production and recycling in Europe.
China plays a huge role in the global trade for battery minerals, including lithium, and dominates production of EV batteries -- Chinese firm CATL makes over a third of all sold worldwide.
In contrast Europe's EV battery sector has been struggling -- Swedish battery marker Northvolt, long seen as the region's best hope in catching up in the sector, filed for bankruptcy earlier this year.
Demand for EVs has also moved more slowly than expected in Europe, prompting Germany and some other EU member states to press the bloc to water down a planned ban on sales of new combustion-engine cars from 2035.
(T.Wright--TAG)
