Years were spent debating doubters who believed Vulcan Energy Resources Ltd.’s idea to produce inexpensive, carbon-free lithium from a brine resource in Germany was too wonderful to be true. It is currently attempting to persuade the German government, a possible investor with a very sizable pocketbook.
In order to get backing for the €1.5 billion ($1.6 billion) project in the upper Rhine Valley, which the company expects to have operational by 2025, company leaders have been in Berlin this week.
Key concerns include how much funding they’re ready to offer and where it will go. Western nations are vying for supplies of vital minerals required to power the energy shift. One of the start-ups attempting to assist Europe in lowering its dependency on imports of lithium and other battery metals is Vulcan, which is listed in Australia and Germany.
Francis Wedin, CEO of Vulcan, stated in an interview that “we need the political backing now, as we still need to raise the lion’s share of our planned investment sum.” We need grants in addition to our planned use of debt and equity to raise the funds.
In a worldwide race to manufacture materials with uses ranging from electric automobiles to health care, the US and the European Union are attempting to overthrow China’s hegemony. Despite the fact that the US Inflation Reduction Act offers more profitable and immediate incentives and tax advantages, detractors claim that despite the EU’s new historic Critical Raw Materials Act’s commitment to open financing channels, the bloc still runs the risk of losing out on investment.
The administration of Chancellor Olaf Scholz has made it clear that it intends to assist startups like Vulcan in their pursuit of vital raw materials in Germany. Before a grant decision has been made, it typically doesn’t comment on specific companies.
According to Economy Minister Robert Habeck, Germany intends to establish a governmental fund with a budget of between €500 million and €1 billion to aid in the mining of raw resources that are essential for advancing the nation’s green transformation. That, however, represents a reduction in spending from what had previously been anticipated as a result of the government’s efforts to reduce its budget for the next year.
fundraising difficulties
Lithium developers have found it difficult to raise money on the capital market, and there is a chance that some potential producers will run out of money before public money starts flowing.
When a short seller questioned the project’s finances in 2021, scepticism about Vulcan’s plan reached a boiling point. Thoughtful purchasers including Stellantis NV, Volkswagen AG, and South Korea’s LG Energy Solution Ltd. have been drawn in by a consistent run of achievements in manufacturing trials. The short seller eventually expressed regret after Vulcan filed a lawsuit.
Wedin stated, “We are certain that our pitch comes at the ideal time as the European Union pushes to lessen its dependence on China as one of the primary suppliers for battery materials. Our message is that we have demonstrated the viability of our technology and that we are now starting the first phase of producing carbon-neutral lithium on a large scale in the centre of Europe.
