The calculus behind Vulcan Energy’s second German lithium project is getting clearer by the day, even as the market keeps its distance from the stock. A pre-feasibility study released on Thursday lays out a compelling case for Project Ludwig in the Upper Rhine Valley — one that suggests the company’s geothermal extraction model can be replicated at better economics than its first effort. But with the share price still trading near 12-month lows, the real test lies in whether outside investors will step in to fund the build-out.
A Step-Change in Project Economics
The Phase 2 study puts Ludwig’s after-tax internal rate of return at 20.2 percent — a meaningful jump from the 13.7 percent projected for Lionheart’s first phase. The project is designed to produce 21,100 tonnes of battery-grade lithium carbonate annually, alongside roughly 3,125 gigawatt-hours of renewable heat per year, over a 30-year operating life.
The net present value comes in at €2.6 billion before tax and €1.727 billion after tax. Development capital is estimated at €1.26 billion, including a 15 percent contingency buffer. Perhaps more telling is the capital efficiency: Ludwig is expected to require 15 percent less capital per tonne of lithium carbonate produced than Lionheart. Operating costs are pencilled in at €4,101 per tonne of Li2CO3, a figure the company says places the project in the cheapest quartile of the industry.
For investors, the message is that Vulcan’s direct lithium extraction model is not a one-off — it can be rolled out again, and more cheaply the second time around.
Resources Get a Major Upgrade
Alongside the economic study, Vulcan has substantially revised its resource estimate for Ludwig. Indicated resources jumped 91 percent to 1,251 kilotonnes of lithium carbonate equivalent at a concentration of 155 milligrams per litre. Inferred resources rose 5 percent to 2,230 kilotonnes. The company also published its first geothermal resource estimate for the site: 193 petajoules in the measured category and 295 petajoules in the less certain bucket.
That expanded resource base strengthens the investment case as Vulcan moves Ludwig into its next definition phase, which will include 3D seismic surveys, further exploration drilling and a final feasibility study.
Courting Strategic Partners From Asia
The company has now formally kicked off a process to bring in a strategic minority investor at the project level, with Vulcan retaining majority control. Executive Chairperson Francis Wedin told Reuters that the company is seeing unsolicited interest from potential strategic backers, with much of it coming from Asia and specifically targeting Ludwig.
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The timing is no coincidence. Vulcan is in the middle of a capital-intensive construction phase at Lionheart, where earthworks and high-voltage line installation are progressing on schedule. Completion of that phase is targeted for the third quarter of 2026, with first production from the lithium chemicals plant expected in 2028. A final investment decision on Ludwig will only come once Lionheart is producing — a sequencing that limits the risk of running two large projects simultaneously, but also pushes Ludwig’s potential cash flows further out.
Fresh capital from Asian investors could help fund the build-out without diluting existing shareholders through further equity raises — a consideration that carries weight given how far the stock has fallen.
A Stock Still Out of Favour
The market’s response to the Ludwig study has been muted at best. The shares closed Friday at €1.66, up 1.4 percent on the day — a modest reaction to what is objectively a positive development. Over the past twelve months, the stock is down 27 percent, and it has lost 35 percent since the start of the year.
The gap to the 52-week high of €4.15, set on October 15, 2025, stands at roughly 60 percent. The shares are far closer to their 52-week low of €1.50, which was touched only recently. Market capitalisation currently sits at around €777 million.
That disconnect between operational progress and share price performance suggests investors are waiting for something more concrete than study results — namely, proof that the funding will actually materialise. The strategic partner process for Ludwig, with its Asian focus, is the next milestone to watch. Whether international capital steps in could well determine if Vulcan can execute its two-project portfolio on the timeline it has laid out.
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