Lithium developer Vulcan Energy [ASX:VUL] rose on Monday following an update regarding its Zero Carbon lithium project in Germany.
VUL noted that onsite construction of its demonstration plant has commenced.
Vulcan Energy expects the plant to start operation in ‘early 2023’ and will test the viability of a sorption-type direct lithium extraction (DLE) method.
Year to date, VUL shares are down 20%.
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Vulcan’s Zero Carbon lithium update
On Tuesday, Vulcan Energy provided a progress update on its Zero Carbon lithium project located in the Upper Rhine Valley, Germany.
These are the highlights from Vulcan Energy’s update today:
- VUL has begun onsite construction at the sorption demonstration plat (located in Landau, Germany)
- The DFS for Phase 1 of the Zero Carbon lithium project is progressing, with an updated pre-feasibility study for Phase 2 also targeted for completion
- This week there will be 3D seismic survey workers migrating to the Insheim area to begin the survey for existing geothermal operations
- VUL has received second preliminary EIA approval for its Taro licence to drill wells for geothermal energy and lithium
- The company’s lithium hydroxide demo plant ‘LiLy’ is still on track for commission in Q1 2023.
The Sorption-Demo Plant
Since March, off-site fabrication has been ongoing — on top of FEED studies, delivery and mobilisation — VUL’s engineers can now start construction.
The plant is to be built on the EnergieSüdwest AG (ESW) premises, which is the local energy utility site for Landau.
The project will need to be de-risked in ways that include process and operations training before the first commercial plant is constructed.
The plant will use a sorption-type lithium extraction method (DLE), wherein lithium chemicals will be extracted from hot brines — a method that has been proven successful on a global scale and boasts low operating costs and high sustainability.
VUL will be using its existing geothermal technology to produce the heating for the extraction process, with brine provided by Landau of geox GmbH.
Cold commissioning is expected to begin late this year, with operations to commence early 2023.
VUL’s CEO Dr Francis Wedin stated:
‘We are excited to begin onsite construction of our Sorption-Demo Plant, which is the logical next step for us to continue upscaling towards commercial production of lithium hydroxide with a net zero carbon footprint. We are also encouraged with continuing receipt of environmental approvals from the authorities, and mobilisation of teams for commencement of “on the ground” seismic survey activities, toward our goal of developing a much larger geothermal renewable energy and Zero Carbon Lithium™ business.’
VUL’s EV strategies
Vulcan said it is working hard to achieve its H2 2022 target for its lithium project. However, the completion date is now pushing more towards Q1 2023.
‘Unprecedented’ supply chain issues have brought on delays in projects, an issue which is expected to continue, calling for management to review timelines.
Having sad that, Vercana GmbH is still expected to reach target operational readiness in early 2023.
Dr Francis Wedin concludes:
‘Vulcan, as with almost every developing project the world over, is being impacted by disruptions to supply chains due to COVID-19 and the war in Ukraine, together with the rising cost of raw materials due to global inflation
‘We believe the Zero Carbon Lithium™ project is crucial for Europe, both from an energy security perspective and due to the need to have a local, reliable supply of critical raw materials like lithium. With these macro-policy tailwinds in our favour, Vulcan looks forward to delivering Zero Carbon Lithium™ Project as soon as possible.’
Rocketing EV Stocks
In 2021, lithium stocks dominated the ASX — eight of the 10 ten best-performing stocks on the All Ordinaries in 2021 were lithium stocks.
But lithium stocks haven’t fared as well in 2022, with many of last year’s high-flyers trading well below their 52-week highs.
The easy money has already been made, it seems.
So does that make it too late to consider the lithium sector?
Two of our top analysts wouldn’t say that’s the case.
In fact, they have recently profiled three Australian lithium stocks they think are being overlooked by the wider market.
Regards,
Kiryll Prakapenka,
For Money Morning
