Increasing positive momentum at local level, drilling to start soon

“Vulcan Energy Resources is experiencing an increasing positive momentum of the political backing, as Germany’s high dependence on Russian gas produces a more favorable climate towards geothermal energy.

This week, Vulcan Energy Resources has received approval for its 3D seismic program from eight local councils within its license area in Rhineland-Palatine. Also, the company is making progress on developing the Taro license, while adding additional exploration licenses to its portfolio. The favorable political environment should continue to provide tailwinds.”

Energy Crisis Underpins Vulcan’s Business Model – BUY

“With the Russian war against Ukraine and the associated sanctions, some of the economic consequences of this war are immediate, as certain metals like aluminum, nickel and palladium, but also crude oil and natural gas have seen steep price increases since the start of the war. Much likely, the push into renewable energies is about to accelerate as energy policy is reevaluated. Going in the same direction, the Fraunhofer Institute sees geothermal energy as a viable substitute for fossil energy sources and recommends action by policymakers and industry for an accelerated penetration. Overall, we expect the conditions for Vulcan to receive a further impetus not only due to the conflict, but also due to the fulfillment of climate targets. We confirm our PT with AUD 20.00, equivalent to EUR 13.22. We reiterate to BUY“

Finalized Agreement With LG Energy, Dual Listing Ahead – BUY

“Vulcan has finalized its agreement with LG Energy Solutions (LGES), the world’s second-largest batteyr maker after China’s CATL. According to the definitive offtake agreement, LGES will purchase between 41,000 to 50,000t of battery grade lithium chemicals over initially 5 years, with a start of commercial delivery set for 2025.”

Once An Exploration Company, Now An Incumbent Operator; PT Raised, Remains BUY

“1 January 2022 marks a fundamental transition of Vulcan. The company will take over the operational geothermal plant in Insheim, Germany. Vulcan will be an incumbent operator, producing renewable power for approximately 8,000 households. Moreover, from now on, there is virutally no risk anymore that Vulcan could be circumvented by potential competitors when it comes to lithium production in the Upper Rhine Valley, as Vulcan has underpinned its indispensable role on the path to commercial lithium extraction.”

Lithium extraction has traditionally been associated with high carbon footprint when extracted from hard rock sources, and high water footprint when extracted from brines. Lithium extraction from brines evaporates large quantities of water in some of the driest places on earth. It also has a significant CO2 footprint, through large use of chemical reagents.​

Whilst multiple companies are attempting to decarbonise the supply chain, hard rock mining lithium minerals is currently a high energy process. The minerals are usually mined at around 1% Li2O, meaning that 99% of the mined material is waste. The ore is concentrated to around 5-6% Li2O, before being transported long distances to refineries which are usually in China. This means that around 94-95% of the shipped material is usually waste. The refinery uses a roasting process, which uses large amounts of fossil fuels to produce lithium hydroxide.