Big week for Vulcan Energy

Vulcan Energy Resources ended the week strongly after managing to make further gains on Thursday’s 14% rise.

Backing up its announced off-take agreement for its zero-carbon lithium with auto giant Volkswagen, Vulcan subsequently told the market it had agreed to acquire an operational geothermal renewable energy power plant in the Upper Rhine Valley in Insheim, Germany.

Using a new German subsidiary of Vulcan, the plant was purchased for approximately €31.5 million, utilising a portion of proceeds from the recent A$200 million capital raise. The acquisition of the Insheim Plant establishes Vulcan as an operational renewable energy business.

Owned by regional energy supplier Pfalzwerke AG, the plant currently has the technical ability to produce a maximum of 4.8MW 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.

It is anticipated that the Insheim Plant will be a source of revenue for Vulcan, having reported sales of €5.8 million and an EBITDA of €2.9 million for the financial year ending 31 December 2020. The plant presently capitalises on Feed-in Tariffs for geothermal power.

The acquisition also includes 100% ownership of the Insheim production licence surrounding the Insheim Plant. Following an MoU signed in November 2019, Vulcan had already completed the Maiden Indicated Lithium-Brine Mineral Resource Estimation at the Insheim license in January 2020, reporting an Indicated Mineral Resource of 722,000 t of contained Lithium Carbonate Equivalent (LCE), with a lithium brine grade of 181 mg/l Li2 .

The Insheim Plant currently pumps lithium-rich brine to the surface for geothermal energy generation before the brine is reinjected into the reservoir.

Vulcan will formally take over the plant from 1 January 2022 and will retain all existing local employees as part of the transition. Vulcan said it also plans to invest in the expansion and modernisation of the power plant.

Vulcan’s Managing Director Dr. Francis Wedin commented: “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."