Zero Carbon Lithium Vulcan Company Acquires Geothermal Power Plant; brine sampling agreement with geox
Vulcan Energy Resources has agreed to acquire an operational geothermal renewable power plant in the Upper Rhine Valley in Insheim, Germany, through the acquisition of 100% of the shares of the entity that owns and operates the plant. A new German subsidiary of Vulcan, based in Karlsruhe, will own and operate the Insheim plant.
Purchased for approximately € 31.5 million, using part of the proceeds of the recent A $ 200 million capital increase, the acquisition of the Insheim plant makes Vulcan a functioning renewable energy company .
Insheim geothermal power station in the Upper Rhine Valley, Germany.
Owned by regional energy supplier Pfalzwerke AG, the plant currently has the technical capacity to produce a maximum of 4.8 MW of renewable electricity, or the equivalent of around 8,000 households, with additional capacity to generate electricity. heater. The plant produces an average of 2.9 MW of electricity.
Vulcan expects the Insheim plant to be a source of revenue, as it reported sales of € 5.8 million and EBITDA of € 2.9 million for the fiscal year ended December 31, 2020. The plant is currently capitalizing on the feed-in tariff for geothermal energy.
The acquisition also includes 100% ownership of the Insheim production license surrounding the Insheim plant. Following a memorandum of understanding signed in November 2019, Vulcan had already completed the first estimate of lithium-brine mineral resources indicated on the Insheim permit in January 2020, declaring an indicated mineral resource of 722,000 t of ‘lithium carbonate equivalent content (LCE), with lithium brine content of 181 mg / l Li.
The Insheim plant currently pumps lithium-rich brine to the surface for geothermal power generation before the brine is fed back into the reservoir.
Vulcan will officially take over the plant from January 1, 2022 and retain all existing local employees as part of the transition. Vulcan also plans to invest in the expansion and modernization of the power plant.
The acquisition of the Insheim plant is in line with Vulcan’s strategy to acquire and modernize existing infrastructure for renewable energy and brownfield brine and reduce risk and develop our Zero Carbon Lithium project. Funded with part of the proceeds of our recent fundraising of $ 200 million, which was strongly supported by existing and new institutional investors, the acquisition demonstrates our willingness and ability to capitalize on strategic opportunities to ensure development timely projects. This is an important first step in establishing Vulcan as an income-generating renewable energy producer. German state and federal policy increasingly support the decarbonization of heating and power grids, with an emphasis on decentralized renewables, and Vulcan intends to build a number of distributed geothermal power plants. renewable energy in the Upper Rhine Valley region.
Combined with our brine sampling agreement with the Landau plant, we will work to assess the feasibility of integrating lithium extraction from these areas into our development plans. The Vulcan team remains focused on developing our first global dual renewable energy and zero carbon lithium business, with phase 1 production to supply the EU battery market targeted for CY2024.
—General Director of Vulcan, Dr Francis Wedin
Brine sampling. In addition to the Insheim acquisition, Vulcan Energy signed a 20-year brine offtake agreement with geox GmbH, the Landau renewable energy geothermal power plant in the Upper Rhine Valley owned by the IKAV Group, a fund manager renewable energy based in Luxembourg and operator.
Under the terms of the agreement, Vulcan has the right to purchase and extract the lithium from the brine produced at Landau, and return it to the plant for re-injection, with an expected volume of brine from the production well at Landau. at least 100 l / s, subject to the financing and drilling of a reinjection well that can accommodate the current flow of the production well, and with a start date of withdrawal of December 30, 2024.
The existing production well at Landau has the tested capacity to produce at a flow rate greater than 100 l / s, but an additional reinjection well is planned to help manage this flow.
In addition, subject to obtaining the relevant authorizations from the authorities, the Landau plant will provide access to host the Vulcan demonstration lithium mining plant, with a target start date of the second quarter of 2022.
Vulcan has successfully operated its first pilot lithium extraction plant in Landau since April 2021. The lithium contents of the brine of the Landau GTLA-1 well are around 180 mg / l Li. Vulcan will research, subject to studies positive feasibility, to integrate this direct debit agreement into its phase 1 development plans.
The brine acquisition and offtake agreement positions Vulcan potentially to expand its Definitive Feasibility Study (DFS) and increase production in response to significant customer demand for sustainable lithium from its Zero Carbon Lithium project.
Vulcan will assess the feasibility of lithium mining and processing from these projects, as part of the investment in the expansion and modernization of these areas, to be incorporated into planned operations. As a result, Vulcan aims for the completion of its Phase 1 DFS in the second half of 2022, updated from its previous target of mid-2022, to allow the inclusion of more project areas in production studies. enlarged. Vulcan’s goal of first commercial lithium production by 2024 remains unchanged.