Message regarding the yearly report received by email today from Chair and CEO.
link or read below.
Dear Friends,
Today we released our H1 FY22 Report. Vulcan has achieved significant project milestones during the half-year ended 31 December 2021, as the Company remains focused on delivering the Zero Carbon Lithium™ Project, targeting phase one lithium production in 2024.
Your Chair, Gavin Rezos, and I have also taken the opportunity to reflect on the current world events and share our thoughts on the energy crisis in Europe. We believe geothermal renewable energy can and will play an important part in achieving Europe and Germany’s energy security and independence. Our message is below, and I hope you have a chance to read it.
As always, thank you for your support.
Dr Francis Wedin
A Message from the Chair and CEO
At Vulcan, the foundation of our business is to enable the decarbonisation of energy supply in Europe, as well as the decarbonisation of battery raw materials for the electrification of transport in Europe. We do this for the benefit of our shareholders, local communities, employees, customers and as part of the solution to the effects of climate change.
As the world has witnessed over the last few weeks, energy security in Europe is being held hostage by Russia, resulting in reverberating geo-political impacts globally, but more keenly felt in Germany which has built a reliance on Russian energy. European citizens and industry, especially in Germany, recognise the threat to their economy, jobs, well-being, and prosperity, as they see large increases in energy bills. They are demanding from their elected representatives that they regain their energy independence, whilst also decarbonising the same energy supply. Already we are seeing new policies from Germany and Europe prioritising the rapid growth of renewable energy sources in response to the magnitude of the energy threat, including geothermal.
Geothermal renewable energy on a mass scale, combined with lithium extraction from the same deep geothermal source, can and will play an important part in achieving Europe and Germany’s energy security and independence. Geothermal heating can reduce reliance on Russian energy.
Fraunhofer, the leading applied research institute in Europe, recently produced a study commissioned by the German government, that showed a quarter of Germany’s heating needs could be supplied by deep geothermal reservoirs, while shallow geothermal heating, using heat pumps, could supply more than 60% of Germany heating needs by 2050.
Vulcan Energy Resources is focused on working with the German government and other European governments to support the development and utilisation of efficient and zero carbon geothermal energy to enhance energy security and neutralise the growing threat on energy and battery metals supply from geopolitical events.
Turning to our results, the first half of FY 2022 has been an important period for Vulcan as we continue to develop our Zero Carbon Lithium™ Project and execute on our plan to build a fully integrated renewable energy and battery-quality lithium chemicals project in Europe. We are swiftly capitalising on strategic opportunities to ensure timely project development.
The Insheim plant acquisition is a significant first step in establishing Vulcan as a revenue generating, renewable energy producer, and Vulcan intends to build several further distributed geothermal renewable energy plants across the Upper Rhine Valley region. Discussions with multiple local stakeholders to provide renewable heating to communities are ongoing. Ultimately, these plants should also provide us with a pathway to sustainable lithium chemicals production for the European electric vehicle industry. We also moved to purchase two deep drilling rigs to ensure we can execute on this large-scale geothermal-lithium development. At a time when Germany is seeking to decarbonise its heating and deploy widespread deep geothermal development, these are strategic assets for Vulcan.
Europe is the world’s fastest growing electric vehicle and lithium-ion battery production centre, yet currently has no local production of lithium chemicals. Our binding, definitive lithium offtake agreements with Volkswagen Group, Stellantis, Umicore and Renault Group, and most recently with LG Energy Solution, ensures we have a diversified mix of offtakers from the cathode, battery and automotive sectors. The quality and diversity of our lithium offtakers is unmatched by our peers, a reflection of the environmental and strategic importance of the project. Importantly, the partnerships are consistent with Vulcan’s strategy to meet Europe’s demand gap, while working with Tier One companies in the EU market.
Our core mission is to build shareholder value by having a materially decarbonising effect on the lithium supply chain for battery electric vehicles, and on energy production in Europe. To do this, we aim to further grow our Zero Carbon Lithium™ Project. Our recent 3D seismic data acquisition, together with the newly granted exploration licenses, give us significant potential to rapidly advance and further scale up our project as the market continues to grow. In response to significant customer demand, we are targeting completion of our Phase 1 DFS in H2 2022, to accommodate the inclusion of more project areas into expanded production studies. The DFS is progressing well. However, because of the ongoing invasion of Ukraine and the aftereffects of the pandemic, we are seeing highly disrupted supply chains, as well as rapidly rising inflation, interest rates and commodity prices. We are expecting the cost of some of our materials for our project development to increase in the short term, and supply chain disruption may also influence our planned timeline. Importantly, government prioritisations may minimise potential short-term impacts. We will keep our shareholders informed and will provide an update once we have greater clarity on this fast-moving global dynamic.
The successful production of the first battery quality lithium hydroxide monohydrate (LHM) sample from Vulcan’s piloting operations, together with securing the site for our planned Central Lithium Plant (CLP) and opening our new laboratory in Karlsruhe-Durlach, are important milestones and demonstrate our commitment to methodically progress, de-risk and execute on our project plan.
Environmental, Social and Governance matters, or “ESG”, are also foundation stones of Vulcan, and we are focused on expanding our ESG goals in the business. We are increasing our engagement with the community, as we seek to build trust and understanding in the regions in which we plan to operate. Our dual listing on the regulated market of the Frankfurt Stock Exchange is part of our concerted strategy to foster widespread public acceptance of our project in the Upper Rhine Valley. Vulcan’s peerless environmental credentials are also an important part of building community support. The Zero Carbon Lithium™ Project is designed to have the highest environmental performance, with the lowest impacts, of any lithium project anywhere in the world. This was reconfirmed with our updated Life Cycle Assessment completed in August 2021.
Our uncompromising approach to the climate and the environment, has allowed us to attract and grow a world- leading scientific, commercial and professional organisation. I would like to thank the team who together are working towards what is likely to be the first raw materials and renewable energy project with net zero greenhouse gas emissions in the world. As the global decarbonisation effort ramps up, Vulcan is focused on delivering the Zero Carbon Lithium™ Project, targeting phase one production in 2024. We stand committed to helping ensure Europe’s and Germany’s energy independence and security of supply of sustainably sourced battery metals.
