Commodity fund releases millions for lithium project

04.12.2025

Source: E & M powernews

Germany and Australia are supporting investments by Vulcan Energy in the Upper Rhine Graben to extract energy and lithium for batteries. This strengthens secure supply chains.

The Federal Ministry for Economic Affairs and Energy (BMWE) and the Australian Embassy in Germany welcome the investments announced by the Australian company Vulcan Energy. The company is developing a project in the Upper Rhine Graben to produce lithium hydroxite monohydrate (LHM) from geothermal brine. According to Vulcan Energy, the company has concluded a financing agreement for around 2.2 billion euros.

The German government is contributing up to 150 million euros via its raw materials fund to the so-called Lionheart project, which is probably named after the medieval English king Richard the Lionheart, who was interned in the Upper Rhine region. The fund is intended to provide German companies with additional supply partners for raw materials. According to the BMWE, this is the German government's response to existing dependencies on critical materials required for batteries and other industries.

The Australian government's export credit agency, Export Finance Australia (EFA), based in Sydney, is also involved. According to its own announcement, it has made an early commitment of 120 million euros. Further funds are coming from the European Investment Bank (EIB), Export Development Canada, the Danish Export and Investment Fund, Bpifrance Assurance Export and the Italian export agency SACE.

Energy and lithium source developed

The project is intended to produce raw materials required by the battery industry. The geothermal brine also supplies heat and electricity from renewable energies. According to Vulcan Energy, it plans to produce around 24,000 tons of LHM per year in the first phase. This quantity would be sufficient for batteries for around 500,000 electric vehicles.

According to the BMWE, the project will contribute to industrial climate targets in Germany and Australia. It is intended to help companies in both countries to decarbonize production processes. The German government sees the project as a signal for a more diversified raw materials policy. According to the ministry, Economics Minister Katherina Reiche (CDU) emphasizes that Germany and Australia want to expand their cooperation in order to secure critical raw materials more broadly. She points out that Australia has reliable resources and technology, while Germany contributes industrial innovation.

Secure supply chains for other raw materials too

Australian Ambassador Natasha Smith emphasizes the common goal of establishing resilient supply chains for critical raw materials. According to her, the funding demonstrates the opportunities offered by cooperation between the two countries.

Additional initiatives are underway at European level. The EIB and the Australian government signed a memorandum of understanding on November 17 to work more closely together on critical minerals investments. According to the European Investment Bank, this agreement should pave the way for future support for projects in Australia.

Author: Susanne Harmsen