PERTH (miningweekly.com) – Lithium developer Vulcan Energy Resources has struck a €31.5-million deal to acquire an operational geothermal renewable energy power plant in the Upper Rhine Valley at Insheim, in Germany.
ASX-listed Vulcan on Friday announced that it would acquire all of the shares in the owner of the plant, with a newly established German subsidiary to be the owner and operator of the plant.
The plant currently has the technical ability to produce a maximum of 4.8 MW of renewable power, equivalent to approximately 8 000 households, with an additional ability to produce heating. The plant is producing 2.9 MW of electricity on average, and it is anticipated that the Insheim plant will be a source of revenue for Vulcan, having reported sales of €5.8-million and earnings before interest, taxes, depreciation and amortisation of €2.9-million for the financial year ending December 31, 2020.
The plant presently capitalises on the feed-in tariff for geothermal power.
“The acquisition of the Insheim plant is consistent with Vulcan’s strategy to acquire and upgrade existing brownfield renewable energy and brine infrastructure and to de-risk and grow our Zero Carbon lithium project,” said Vulcan MD Dr Francis Wedin
“Funded with a portion of the proceeds from our recent A$200-million capital raising, which was strongly supported by existing and new institutional investors, the acquisition demonstrates our willingness and ability to capitalise on strategic opportunities to ensure timely project development.
“This is a significant first step in establishing Vulcan as a revenue-generating, renewable energy producer. German state and Federal policy increasingly supports decarbonising heating and power grids, with a focus on decentralised, renewable energy, and Vulcan intends to build a number of distributed geothermal renewable energy plants across the Upper Rhine Valley region.”
Wedin noted that Vulcan subsidiaries GeoThermal Engineering and Global Engineering & Consulting-Company (Gec-Co) have already been successfully active in Insheim for many years.
“We will capitalise on our local knowledge and expertise to continue to make a positive contribution to the energy transition in the region, while discussions with multiple local stakeholders to provide renewable heating to communities and renewable power to the German grid are ongoing.
“Combined with our brine offtake agreement with the Landau plant, we will work to assess the feasibility of integrating lithium extraction from these areas into our development plans. The Vulcan team remains focused on developing our world-first dual renewable energy and Zero Carbon lithium business, with Phase 1 production to supply the EU battery market targeted for 2024.”
Vulcan on Friday also announced a 20-year brine offtake agreement with geox GmbH, the operational Landau geothermal renewable energy plant in the Upper Rhine Valley owned by the IKAV Group, a Luxembourg-based renewable energy fund manager and operator.
Under the terms of the agreement, Vulcan has the right to purchase and extract the lithium from the brine produced from Landau, and return it to the plant for re-injection, with expected brine volume from the production well of at least 100 l/s, subject to the financing and drilling of a re-injection well which can accommodate the current production well flow, and with an offtake start date of the end of December 2024.
In addition, subject to obtaining the relevant permissions from the authorities, the Landau plant will provide access to accommodate Vulcan’s demonstration lithium extraction plant, with a target startup date of the second quarter of 2022.
Vulcan told shareholders that the acquisition and brine offtake agreement positions the company to potentially expand its definitive feasibility study (DFS) and increase production in response to significant customer demand for sustainable lithium from its Zero Carbon lithium project.
Vulcan will assess the feasibility of extracting and processing lithium from these projects, as part of investment into an expansion and modernisation of these areas, to be incorporated into planned operations.
Vulcan is targeting completion of its Phase 1 DFS in the second half of 2022, updated from its previous target of mid-2022, to accommodate the inclusion of more project areas into expanded production studies. Vulcan’s target of first commercial production of lithium by 2024 remains unchanged.