Vulcan Energy Resources Limited (ASX: VUL) has secured a comprehensive EUR 2.2 billion (AUD 3.929 billion) Vulcan Energy financing package to fully fund Phase One of its Lionheart lithium and renewable energy project. The announcement, released on 3 December 2025, marks a watershed moment for Europe’s battery supply chain ambitions.
Figure 1: Aerial view of Vulcan’s geothermal drilling site in Germany’s Upper Rhine Valley
The Vulcan Energy Phase One funding package enabled the Company’s Board to take a positive Final Investment Decision (FID) on Phase One Lionheart. Construction is due to commence in the coming days, aligning with the Company’s Q4 2025 target for the groundbreaking geothermal lithium project in Germany’s Upper Rhine Valley.
EUR 2.2 Billion Funding Mix Unlocks Construction Phase
The comprehensive Vulcan Energy financing structure demonstrates unprecedented support from European institutions. The package includes EUR 1.4 billion (AUD 2.5 billion) in strategic backing from German, European and international government-backed institutions supporting the lighthouse European project.
Strategic corporate and climate infrastructure investment totals EUR 263 million (AUD 470 million) from HOCHTIEF, Siemens Financial Services and Demeter. These partners bring engineering, technology and energy transition expertise to de-risk project delivery and execution for the Vulcan geothermal lithium project.
The Vulcan Energy Phase One funding comprises multiple components working in concert. EUR 1.185 billion (AUD 2.116 billion) comes from senior debt funding by a syndicate of 13 financial institutions, including the European Investment Bank, five Export Credit Agencies and seven commercial banks.
Phase One Lionheart Targets 24,000 Tonnes Annual Lithium Hydroxide Production
Phase One Lionheart involves constructing an integrated lithium and renewable energy project targeting production capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM) annually. This volume provides sufficient material for approximately 500,000 electric vehicle batteries per annum over an estimated 30-year project life.
Figure 2: Top-down view of Vulcan’s geothermal energy
The Vulcan geothermal lithium project delivers co-products of 275 GWh of renewable power and 560 GWh of heat per annum for local consumers. Key facilities include geothermal-lithium brine production wells with supporting infrastructure, ancillary infrastructure including substations and pipelines, and renewable power and heat plants.
HOCHTIEF Leads Strategic Investment in Vulcan Energy Phase One Funding
HOCHTIEF Aktiengesellschaft is demonstrating continued support through a total investment of EUR 169 million (AUD 302 million) in the Vulcan Energy financing package. This comprises EUR 39 million (AUD 69 million) investment in the Phase One Lionheart project entity and a cornerstone subscription of up to EUR 130 million (AUD 232 million) in Vulcan shares.
A consortium of strategic industrial investors comprising HOCHTIEF, Siemens Financial Services (investing EUR 67 million) and Demeter through its Climate Infrastructure Fund (investing EUR 28 million) agreed to invest an aggregate of EUR 133 million (AUD 238 million) for a 15% equity interest in PhaseOneCo.
German Government Backing Strengthens Vulcan Geothermal Lithium Project Credentials
The Vulcan Energy financing package includes EUR 204 million (AUD 364 million) in non-dilutive German government grants supporting Phase One Lionheart construction. This reflects strong backing from both German Federal and State authorities for Europe’s critical raw materials supply chain strategy.
Figure 3: Map showing Vulcan’s geothermal lithium project footprint
EUR 100 million (AUD 179 million) comes from the German Federal Ministry of Economic Affairs and Climate Protection for geothermal energy production. An additional EUR 104 million (AUD 185 million) comes from the Federal German Government and the States of Rhineland-Palatinate and Hesse under the German Federal Ministry of Economy and Energy for lithium production.
KfW, via a EUR 1 billion Raw Materials Fund endowment established by the German Federal Government, agreed to invest EUR 150 million (AUD 268 million) by subscribing for a 14% equity interest in Vulcan Energie Ressourcen GmbH. This investment highlights Phase One Lionheart’s importance to Germany and Europe’s energy and critical minerals security.
Debt Financing Syndicate Provides EUR 1.185 Billion with Flexible Terms
The Vulcan Energy Phase One funding debt package comprises EUR 1.185 billion (AUD 2.116 billion) from 13 financiers, with the European Investment Bank as the cornerstone lender providing EUR 250 million (AUD 446 million). Export Development Canada provides EUR 200 million (AUD 357 million), funded in US dollars, up to a maximum of USD 235 million.
Export Finance Australia contributes EUR 120 million (AUD 214 million) funded in US dollars, while the Export and Investment Fund of Denmark provides EUR 100 million (AUD 179 million).
Equity Raising Completes Vulcan Energy Financing Structure at EUR 4.00 Per Share
Vulcan is launching an institutional placement combined with a 1-for-1.128 accelerated non-renounceable entitlement offer comprising the issue of up to 269 million new fully paid ordinary shares. The Equity Raising aims to raise up to EUR 603 million (AUD 1.08 billion), of which EUR 528 million (AUD 943 million) is fully underwritten by Canaccord Genuity (Australia) Limited and Morgan Stanley Australia Securities Limited. The Vulcan Energy financing equity component will be at a fixed price of EUR 2.24 / AUD 4.00 per New Share.
Phase One Lionheart Economics Project EUR 566 Million Annual Revenue
Phase One Lionheart targets 24,000 tonnes per annum LHM production capacity with 275 GWh power and 560 GWh heat production capacity over a 30-year project life.
Figure 4: Phase One Lionheart economic summary outlining production capacity
The average 10-year LHM realised price stands at EUR 20,456 per tonne LHM, supporting average revenue of EUR 566 million per annum. Average EBITDA reaches EUR 427 million per annum with an impressive 75% EBITDA margin supporting the Vulcan geothermal lithium project economics.
CAPEX totals EUR 1.476 billion, including 15% contingency, an increase from 10% in the End of Validation Phase One Lionheart economics study released in December 2024. Operating costs (C1) total EUR 3,588 per tonne LHM, supporting strong project returns.
NPV pre-tax reaches EUR 1.838 billion with post-tax NPV of EUR 1.152 billion calculated at an 8% discount rate. Internal rate of return (IRR) pre-tax stands at 15.6% unlevered and 19.0% levered, with post-tax IRR of 13.7% unlevered and 16.6% levered.
Sustainability Credentials Earn Highest-Ever S&P Global Rating for Mining Sector
Phase One Lionheart received a Dark Green rating from S&P Global, the highest ever such rating for a mining and metals company globally. This recognition validates Vulcan’s zero-carbon lithium extraction methodology using geothermal energy and proprietary VULSORB technology.
Fully contracted lithium offtake for the first ten years of production with high-quality European-focused offtake partners ensures revenue certainty.
Share Price Movement
Vulcan shares traded at AUD 6.130 on 3 December 2025 following the Vulcan Energy financing announcement. The Company’s market capitalisation stands at approximately AUD 1.43 billion prior to the equity raising completion.
Figure 5: Vulcan Energy (ASX: VUL) share price chart over the September–December 2025
The stock’s 52-week range spans AUD 3.360 to AUD 7.520 per share. The equity raising represents 115% of existing Vulcan shares on issue, creating significant dilution for existing shareholders not participating in the Entitlement Offer.
ALSO READ: Transurban Distribution 2025: Infrastructure Giant Confirms 34 Cents Interim Payment
FAQ
Q1: What is the total size of the Vulcan financing package?
The total Phase One Financing Package amounts to approximately EUR 2.2 billion (AUD 3.929 billion), fully funding the Phase One Lionheart development costs through construction, commissioning and start-up into first cash flow generation.
Q2: When will Phase One Lionheart commence lithium production?
First commercial LHM production is targeted to commence in 2028 following a 2.5-year construction period. Construction is due to commence in the coming days following the positive Final Investment Decision.
Q3: What is the offer price for the Vulcan financing equity raising?
The Equity Raising will be at a fixed price of EUR 2.24 / AUD 4.00 per New Share, representing a 34.7% discount to Vulcan’s closing price of AUD 6.13 per share on 2 December 2025.
Q4: How much lithium will Phase One Lionheart produce annually?
Phase One Lionheart targets production capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM) per annum, sufficient for approximately 500,000 electric vehicle batteries annually over an estimated 30-year project life.
