Vulcan Energy Resources has signed a deal for chemicals producer Nobian to invest €161m in the former’s main lithium plant in Germany.
Under the agreement, Nobian will also acquire a 50% stake in the project.
In the first phase of the project, Vulcan aims to produce 24,000tpa of lithium hydroxide monohydrate (LHM) from the plant.
The agreement will also see Nobian fund 50% of the project’s expenditure and the remaining will be funded via debt financing.
In addition, the deal also divides Vulcan’s LHM project into two special-purpose vehicles (SPVs).
SPV1 will include lithium extraction facilities, land, wells, pipelines, and geothermal power plants, along with the infrastructure needed to produce both lithium chloride (LiCl) and renewable energy.
The first entity will sell its LiCl output to SPV2, which includes the central lithium plant that will convert LiCL into LHM.
Nobian will be acquiring 50% of SPV2, whose LHM output will be bought by Vulcan’s parent company, which will then sell it to offtakers.
Vulcan managing director and CEO Francis Wedin said: “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.”
Vulcan said it talking to “strategic counterparties” to finance SPV1, where it plans to use a similar approach to SPV2 to attract project-level equity investment.