Vulcan Energy Resources Commences Construction on Major Lithium Project

The transition from planning to physical construction is now underway for Vulcan Energy Resources. With all necessary permits secured and financing finalized, the company has initiated work on its landmark Lionheart lithium project in Germany. This move follows the successful closure of a €2.2 billion funding package in December 2025, marking a pivotal shift for the Australian-German developer from capital raising to project execution.

Central to Vulcan's strategy is the production of battery-grade lithium hydroxide from geothermal brines. The initial phase of the Lionheart project targets an annual output of 24,000 tonnes of lithium hydroxide monohydrate. According to company estimates, this volume would be sufficient to supply approximately 500,000 electric vehicle batteries each year. The integrated operation is also designed to generate 275 GWh of renewable energy and 560 GWh of thermal energy annually over a planned project lifespan of 30 years.

A review of the company's recent financial and corporate updates reveals several critical data points:

• The total funding package secured amounts to €2.2 billion.
• Cash reserves stood at €523.13 million as of the end of the fourth quarter in 2025.
• Based on current expenditure rates, the company's cash position provides a projected runway of 72.2 quarters.
• Major shareholder and construction contractor HOCHTIEF has increased its equity stake to 15.41%.

Breakdown of the €2.2 Billion Financing

Finalized in December 2025, the comprehensive financing arrangement injected significant capital into the company. The retail component of the associated rights issue alone raised approximately €147 million (A$263 million). When combined with institutional investments, the total funds raised reached about €545 million (A$973 million).

A subsequent announcement to the Australian Securities Exchange (ASX) on 29 December 2025 detailed the issuance of 66 million new shares, which commenced trading on 31 December 2025.

Should investors sell immediately? Or is it worth buying Vulcan Energy?

The quarterly report for the period ending 31 December 2025 provides further clarity on cash movements. It shows a net cash inflow of €508.78 million from financing activities. This was offset by operational outflows of €7.17 million and investment outflows of €25.97 million. The company also recorded an impairment charge of €7.8 million related to drilling complications at its Schleidberg site.

Construction Progress and Operational Milestones

Physical construction activities are now visible on the ground. Site work has begun at Landau for the Geothermal Lithium Extraction Plant (G-LEP). Simultaneously, development of the central lithium plant is progressing in Frankfurt-Höchst. Vulcan Energy states that all major construction permits for Phase One are in hand and contracts for engineering and construction management have been signed.

Supporting the project's feasibility, the company reported positive results on 21 January 2026 from production tests at its first new Lionheart well, designated LSC-1b. The tests confirmed a production potential ranging between 105 and 125 litres per second, validating the reservoir assumptions within the Lionheart Field Development Plan.

Forward-Looking Schedule

The company's operational calendar includes several imminent milestones. A gravimetric and magnetic aerial survey, initiated in November 2025, is scheduled for completion in February 2026. Stakeholders can expect the next quarterly report, which will include key metrics on construction progress, by the end of April 2026. Vulcan Energy's Annual General Meeting is set for 28 May 2026.