Vulcan Energy Resources Limited (ASX: VUL) has announced a highly encouraging update on its ambitious Zero Carbon Lithium™ Project.
The company reported that Scoping Study for Vulcan’s Zero Carbon Lithium™ Project has demonstrated the potential for a combined operation producing lithium hydroxide and renewable energy, with net zero carbon footprint.
VUL said that the Scoping Study is based on a staged expansion plan. Stage 1 would comprise of construction and operation of Direct Lithium Extraction (DLE) and lithium hydroxide plant at an operating, producing geothermal well and power plant, and; Stage 2 would comprise of drilling ten new geothermal production wells, construction of new, combined geothermal, DLE and lithium hydroxide plant at Vulcan’s 100 %-owned Ortenau license.
Vulcan Energy said that multi-disciplinary, international in-house and independent expert team, in conjunction with specialist consultants, is behind the first of its kind Zero Carbon Lithium™ study.
The company reported that the discussions with potential strategic off-take partners and consideration of financing alternatives have commenced.
VUL said that the positive Scoping Study outcomes are expected to trigger the commencement of mineral processing work and a Pre-Feasibility Study (PFS) targeted for completion in late 2020.
Vulcan said that it is leading the mining and resources industry with its unique Zero Carbon Lithium™ Project.
Zero Carbon Lithium™ project
Vulcan Zero Carbon Lithium™ Project located in Germany, is planned to be a combined geothermal energy and lithium hydroxide monohydrate production project.
The project lies within a region well-serviced by local industrial activity, at the heart of the European auto and lithium-ion battery manufacturing industry, just 60km from Stuttgart. The burgeoning European battery manufacturing industry is forecast to be the world’s second largest, with currently zero domestic supply of battery grade lithium products.
The project is aiming to be Europe’s and the world’s first Zero Carbon Lithium™ project. It aims to do achieve this by producing battery-quality lithium hydroxide from hot, sub-surface geothermal brines pumped from wells, with a renewable energy by-product fulfilling all processing energy needs.
The project is situated within one of the most well-studied and well-explored graben systems in the world. This means that the lithium-rich brine in the field is very well understood, and large amounts of seismic and geochemical data are readily available, reducing the need for exploration time and spend.
The company reported that a Life Cycle Assessment (LCA) from cradle-to-gate was carried out for the Vulcan Project and benchmarked with different lithium industry production routes that could supply the European market.
VUL said that a Scoping Study was carried out for the project, which is a preliminary technical and economic study of the potential viability of developing the Vulcan Lithium and Geothermal Project by constructing a series of wells, geothermal and lithium plant to produce a battery-quality, lithium hydroxide with net zero carbon footprint.
Staged expansion plan
VUL reported that the Scoping Study is based on a staged expansion plan.
Stage 1 Production Plant (Insheim License) consists of direct extraction and lithium plant to be located at the Insheim geothermal power plant. It is contemplated that this would commence a year prior to the larger Stage 2, as a means of scaling up commercial production.
Stage 2 Production Plants (Ortenau License) consists of Plant one: four well pads, four extraction and four injection wells, geothermal power plant, direct extraction and lithium plant; and Plant two: six well pads, six extraction and six injection wells, geothermal power plant, direct extraction and trucking of lithium concentrated liquor to the Stage 2 lithium plant. For both Stage 2 plants, it is contemplated that production would start in 2024.
Stage 2 is dependent on Vulcan being able to permit and drill the Company’s own geothermal production wells.
Encouraging SS results
Vulcan energy has now announced a highly positive update on its ambitious plan to produce the world’s first, premium Zero Carbon Lithium™ hydroxide product.
VUL reported that the results of the study indicate that Vulcan has the potential to be the first negative carbon lithium project in the world, helping to decarbonize a highly CO2-intensive product.
The company said that the Vulcan project has the potential to have the lowest impact with a negative climate change impact due to CO2 emissions being offset through the co-generation of geothermal energy along with LiOH∙H2O.
Test work required for PFS identified
The company announced that the study identified the required future test work for the Pre-Feasibility Study which includes: further definition of the geothermal brine resource and testing for pretreatment options to optimize lithium recovery; bench-Scale and Pilot Plant Test Work to define engineering data and minimize process risk; amenability and optimization test work for direct extraction to provide confidence in the flowsheet design and target production of a small sample of high purity product; and further development of engineering to a Pre-Feasibility Study level to better define the process flowsheet and site-specific infrastructure requirements.
Funding of project
Vulcan said that any financing would be undertaken via a combination of debt and equity, similar to a number of comparable projects in the lithium sector which have been funded in the past 24 months.
VUL said that it is likely that the Vulcan Lithium Project will require the support of a resource credit fund or alternatively it may be possible in the bond market. It may also be necessary and/or desirable to have an offtake partner invest in the Company or the Project.
The company said that it is possible that funding may be dilutive to, or otherwise affect the value of the Company’s existing shares. It is also possible that the Company could pursue other strategies to provide alternative funding options including undertaking a corporate transaction, seeking a joint venture partner or asset sales.
The company reported that pre-Feasibility Studies will now commence and are expected to be completed in late 2020, after which Definitive Feasibility Studies, permitting and construction will follow. It is currently estimated that Stage 1 could commence in 2023, and 2024 for Stage 2.
In addition to its Inferred Mineral Resource on the Ortenau license and Indicated Mineral Resource in the Insheim MoU license, Vulcan has one exploration license (Mannheim) and three license applications (Ludwig, Rheinau and Taro) which contain Exploration Targets.
Vulcan reported that it aims to conduct development work, such as processing testwork and seismic data acquisition and evaluation, to continue to convert Exploration Targets to Inferred Resource, and Inferred Resources to Indicated, where possible.
VUL’s Managing Director, Dr. Francis Wedin said: “Today marks a major milestone for the Company, and I would like to take this opportunity to thank our in-house team of lithium and geothermal experts, as well as our technical consultants, for their hard work in completing this study within our tight timeframes.
The Scoping Study outlines a plan to produce battery-quality lithium hydroxide from Stage 1, ultimately growing with the market in Europe during a considerably larger Stage 2. Over the project life, both stages were found to have a positive outcome. Critically, the project benefits from readily available renewable heat and power to be used in lithium processing, and lack of high cost mining. The smaller Stage 1 provides a sensible first step for the Company.
We have shown with this Scoping Study the potential to commercially produce the raw materials required for the transition to electric vehicles, with a net zero carbon footprint, while decarbonizing the German energy grid with generation of renewable energy. We designed our Zero Carbon Lithium™ process from the ground up to be a net zero carbon, minimal impact process.
Our process is the perfect fit for the Vulcan Lithium Project, a combined geothermal and lithium brine resource in the heart of the European lithium-ion battery industry, and the largest lithium resource in Europe by a considerable margin. The Company now has eight major unique selling points – Unique Zero Carbon Lithium™ Process; Positive Scoping Study; Diversified Project; Size; Location – The Right Market, Compelling Supply-Demand Dynamic; Rapidly Advancing Lithium Project; Team; and Local Partners & Infrastructure Access.
We are already planning the next steps as we look towards our mineral processing test work and Pre-Feasibility Study, and we plan to maintain our momentum of being one of the fastest growing lithium projects in the world.”