Vulcan Energy wants to supply battery manufacturer LG with lithium

The lithium supplier Vulcan Energy from Germany has signed a long-term supply contract with the South Korean battery manufacturer LG Chem. LG Energy Solutions (LGES) plans to purchase 5,000 metric tons of lithium hydroxide in the first year and gradually increase the volume to 10,000 tons per year, the Australian-listed company Vulcan Energy announced on Monday.

The start-up from Karlsruhe wants to extract lithium from thermal water in the depths of the Upper Rhine Rift. The contract is to start at the planned start of production in mid-2024 and run for five years.

Opel’s parent company Stellantis is one of the potential buyers of Vulcan, and according to insiders it has issued a letter of intent to purchase the raw material that is important for e-car batteries. The order volume from LGES will make up a quarter of total production by the ramp-up in 2026, Vulcan Energy said. The demand from automobile manufacturers is currently very high, said Vulcan manager Francis Wedin. The company may want to grow by taking on other projects and is also considering an IPO, he added.

With the switch to electric cars, the demand for the battery raw material is increasing massively. According to estimates by geologists, the region in southwest Germany contains enough lithium for more than 400 million electric cars. Using the Vulcan Energy process, hot thermal water is pumped to the surface from a depth of thousands of meters, generating heat and electricity. The lithium hydroxide can be extracted from the water, which then flows back down into the depths. By 2024, 15,000 tons of it are to be extracted per year in two plants. In the second phase, starting in 2025, the company is planning three more plants for a volume of 40,000 tons. That would be enough lithium for the battery cells of a million electric cars. According to earlier information, this will require investments of 1.7 billion euros.

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