- Vulcan Energy (VUL) signs a term sheet agreement with Germany-based Nobian for a 50/50 joint venture and equity financing for the Vulcan Central Lithium Plant (CLP)
- VUL will leverage Nobian’s long-standing experience in industrial crystallisation, electrolysis, and operating chloralkali plants for the construction of its CLP
- VUL Managing Director and CEO Francis Wedin says Nobian’s equity investment will help the company provide secure, sustainable and carbon-neutral lithium chemicals into the European electric vehicle market
- The CLP SPV2 phase has been pre-valued at €322 million, and Nobian will contribute €161 million (A$265 million) based on this valuation.
- The agreement is subject to the completion of definitive agreements between the companies, which is expected within ten weeks from the date of the term sheet
- VUL shares are up 0.35 per cent to $5.75 at 10:32 am AEST
Vulcan Energy (VUL) has signed a term sheet agreement with Germany-based Nobian GmbH to form a 50/50 joint venture and equity financing for the company’s Central Lithium Plant (CLP) in Germany as part of its Zero Carbon Lithium project.
Through the proposed strategic partnership, VUL will be able to take advantage of Nobian’s longstanding experience in industrial crystallisation, electrolysis, and operating chloralkali plants.
Vulcan’s Zero Carbon Lithium project uses chloralkali-type electrolysis cells to produce lithium hydroxide at its CLP. The partnership between Vulcan and Nobian is the result of 15 months of collaboration between the businesses.
“This is a positive step forward as part of our stated strategy to prioritise project-level equity investments for funding of phase one of our Zero Carbon Lithium project,” VUL Managing Director and CEO Francis Wedin said.
Under the agreement, the two companies will form a joint venture special purpose vehicle, dubbed SPV2, as part of Vulcan’s two-phased approach to project financing.
The SPV1 phase includes the plant and infrastructure associated with producing renewable energy and lithium chloride (LiCI) and includes land, wells, pipelines, geothermal testing and lithium extraction plants.
SPV2 envisions the production of the completed CLP, which would convert lithium chloride into lithium hydroxide monohydrate (LHM) with a by-product of hydrogen chloride (HCl).
LHM will then be sold to Vulcan’s parent company, which will distribute the product to VUL off-takers.
The CLP SPV2 phase has been pre-valued at €322 million, and Nobian will contribute €161 million (A$265 million) in cash as equity to fund the capital expenditures of the CLP based on this valuation.
“After 15 months of collaboration, Nobian and Vulcan have developed a very positive
relationship, and we welcome this step towards Nobian’s equity investment into our Central Lithium Plant (CLP) in Germany to assist us with providing secure, sustainable and carbon-neutral lithium chemicals into the European electric vehicle market, helping to enable the transition to fully electrified transport,” Dr Wedin said.
The agreement is subject to the completion of definitive agreements between the companies, which is expected within ten weeks from the date of the term sheet.
VUL shares were up 0.35 per cent to $5.75 at 10:32 am AEST.