The Danish Export and Investment Fund (EIFO) has just signed an export loan of almost DKK 750 million to a project company that will establish large-scale geothermal lithium production in southwestern Germany.
The project is a "Strategic Project" under the EU's Critical Raw Materials Act and will establish Europe's first integrated production of renewable energy and heat as well as the extraction and processing of lithium, a key component in, for example, electric car batteries.
Today, China dominates the global refining of lithium. But with the project, Europe will get a new, sustainable source that will handle all links in the value chain from extraction to refining.
- I am pleased that EIFO is helping to finance this strategically important project, which strengthens Europe's supply and reduces dependence on imports from China. It fits directly into EIFO's agendas on green energy, European independence and access to critical minerals. Lithium is crucial for the green transition, and with this project, Europe will get a new sustainable source, says Peter Boeskov, CCO at EIFO.
The project has a total debt financing of just over DKK 7.5 billion from a consortium consisting of the European Investment Bank (EIB), ABN AMRO, Unicredit, Natixis, ING, BNP Paribas, KommunalKredit, OCBC and four other export credit institutions from France, Canada, Italy and Australia.
Long-term supply agreements in place
The project extracts lithium from warm salt water in the Upper Rhine Valley in Germany while simultaneously producing renewable geothermal energy. Vulcan's method uses recycled water and green energy and is therefore less environmentally damaging than traditional, CO2-intensive lithium extraction methods.
The project aims to produce 24,000 tons of battery-grade lithium per year.
This corresponds to enough lithium for around 500,000 batteries for electric cars per year, with a by-product of 275 GWh of renewable electricity and 560 GWh of heat annually for local consumers over an estimated project life of 30 years.
Vulcan has already entered into long-term supply agreements with, among others, Stellantis, a global car manufacturer with brands such as Peugeot, Jeep and Fiat, LG Energy Solution, a leading manufacturer of lithium-ion batteries, Umicore, an international materials technology and recycling company, and Glencore, one of the world's largest raw materials and mining groups.
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