Under the agreement, the two firms will equally own the Cesano geothermal lithium permit, which has potential for lithium battery chemicals production.
The parties will undertake a joint scoping study for the licence and explore other potential geothermal lithium projects in the country.
Vulcan’s Cesano Permit comprises wells drilled by Enel Group. These wells resulted in hot geothermal brine with high lithium values.
By leveraging their respective lithium extraction and geothermal expertise, Vulcan and EGP will explore the potential development of geothermal lithium projects in the area.
Vulcan managing director Dr Francis Wedin said: “Vulcan is aiming to increase the future supply of our sustainable lithium product in response to significant customer demand, as we leverage our extensive experience in lithium extraction from heated brines to have a materially decarbonising effect on global electric vehicle supply chains.
“By growing and diversifying our project development portfolio, we ultimately aim to develop a globally significant Zero Carbon Lithium business focused on Europe, for Europe.”
Global demand for lithium, which is used in making lithium-ion batteries in electric vehicles, has increased as the world moves towards cleaner forms of energy.
Furthermore, Vulcan Energy announced a positive result for its preliminary environmental impact assessment application to drill six wells for geothermal energy and lithium at its Taro licence in Germany.