Vulcan and Nobian Sign $354 Million Deal to Develop World's First Zero Carbon Lithium Project

The Australian mining company Vulcan Energy Resources and a European leader in essential chemical manufacturing, Nobian, are partnering to form a 50/50 joint venture and equity financing for Vulcan's Central Lithium Plant to aid the development of the world's first Zero Carbona Lithium and renewable energy project. The agreement prioritizes examining the prospect of producing Lithium Hydroxide from Lithium Chloride in Germany. Nobian will employ its electrolysis and chloride manufacturing skills in collaboration with Vulcan to generate Lithium Hydroxide from Lithium Chloride.

Further, it will employ its electrolysis and chloride manufacturing skills in collaboration with Vulcan to generate Lithium Hydroxide from Lithium Chloride. To do this, the European leader will host and facilitate an electrolysis and crystallization demonstration facility in Germany at Vulcan Geothermal-Lithium reservoir locations. Vulcan will oversee the demonstration plant in partnership with its European partner, which is expected to be operational later this year.

The two market players will also discuss chlorine and hydrogen offtakes, both of which are by-products of the electrolysis process, as well as the greater potential of a commercial lithium facility. Based on mutually agreed pre-money values of $354 Mn for CLP SPV2, the Carlyle Group and GIC-owned Nobian will contribute $177 Mn in cash as equity to cover capital expenditure for the CLP and will purchase 50% of the SPV2 Joint Venture.

Phase One of Vulcan's combined 24,000 tonnes per year Lithium Hydroxide Monohydrate and renewable energy project has been separated into two independent Special Purpose Vehicles. SPV1 consists of the plant and infrastructure involved with the generation of renewable energy and Lithium Chloride, whereas SPV2 consists of the CLP that transforms LiCl to LHM.

Vulcan and Nobian expect to sign definitive agreements for the new JV within the next ten weeks. Vulcan's Zero Carbon Lithium Project envisions producing renewable geothermal energy as well as Lithium Hydroxide for electric vehicle lithium batteries from the same deep brine source in Germany's Upper Rhine Valley. The proposed Nobian contract involves the construction of a hydroxide facility in Frankfurt that will convert Lithium Chloride to Lithium Hydroxide Monohydrate for sale to Vulcan for distribution to its target clients in Europe.