Vulcan Energy has crossed the final procurement threshold for its Lionheart lithium project, signing a €40 million framework agreement with Siemens that completes the supplier network and officially closes the planning phase. The deal, which positions Siemens as the primary automation partner across three sites — the lithium extraction plant in Landau, the central lithium facility at the Industriepark Höchst in Frankfurt, and the production drilling locations — covers control systems, industrial networks, cybersecurity, and safety technology.
The contract is structured as a master agreement, allowing Vulcan to call off individual work packages in stages as construction progresses. A separate memorandum of understanding extends Siemens’ preferred partner status for automation through 2035, covering future project phases. Siemens Financial Services is also contributing €67 million in equity to the overall €2.2 billion financing package.
That package breaks down into roughly €1.185 billion in senior loans from a consortium of 13 financial institutions, including the European Investment Bank and five export credit agencies, plus €204 million in German federal subsidies. Additional equity backers include KfW and HOCHTIEF, with Demea Sustainable Investment also participating on the equity side. The Danish export credit agency EIFO has been brought into the financing consortium by Siemens.
Royalty Relief and Production License Secure Early Economics
The state of Rhineland-Palatinate has granted Vulcan an exemption from lithium production royalties, running initially through the end of 2030. The measure, designed to bolster the project’s economics during the critical ramp-up phase, is based on a provision in the Federal Mining Act last applied to geothermal projects in 2009. The exemption will be reviewed one year before expiry.
In early April, Vulcan also received its first commercial lithium production license in the Upper Rhine Graben. The LiThermEx license for the Insheim area runs for an initial six-year term.
Offtake Agreements Lock in Every Tonne of Phase 1 Output
With the Siemens contract signed, all offtake agreements for Lionheart’s Phase 1 production are now in place. The entire annual capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM) is contracted ahead of the planned 2028 production start. Four major buyers have divided the output among themselves:
Should investors sell immediately? Or is it worth buying Vulcan Energy?
- Stellantis: 128,000 tonnes of LHM over ten years
- Glencore: 36,000 to 44,000 tonnes of LHM over eight years
- LG Energy Solution: 31,000 tonnes of LHM over six years
- Umicore: 23,000 tonnes of LHM over six years
Stellantis has secured the largest single allocation by a wide margin, underscoring the pressure on automakers to lock in European lithium sources for the long haul. The project carries Strategic Project status under the EU’s Critical Raw Materials Act.
Cash Burn Under the Microscope as Q1 Report Looms
Vulcan publishes its first-quarter report on April 29 — the first financial disclosure since construction began. Analysts will be watching closely to see whether operating cash outflows have remained under control despite multiple active work sites. In the prior quarter, the company burned €7.2 million in cash.
Drilling is already running in parallel at two locations: Schleidberg and Trappelberg. The main drilling phase is scheduled for the second half of 2026, with commercial production targeted for 2028 — two and a half years after construction start.
Executive Compensation Takes a Hit
A less positive note: CEO Cris Moreno and CFO Felicity Gooding have forfeited parts of their performance-based compensation. More than 400,000 performance rights lapsed at the end of March, pointing to missed internal milestones. The dilution that would have accompanied those rights is now off the table.
At the annual general meeting in late May, shareholders will vote on the appointment of Roberto Gallardo as an independent director. Gallardo was nominated by HOCHTIEF, which secured nomination rights as part of its investment.
Ad
Vulcan Energy Stock: Buy or Sell?! New Vulcan Energy Analysis from April 23 delivers the answer:
The latest Vulcan Energy figures speak for themselves: Urgent action needed for Vulcan Energy investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from April 23.
Vulcan Energy: Buy or sell? Read more here...
