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Vulcan energy deal with European carmaker a French first

Updated: May 20

Stellantis’ major car plant in Mulhouse. Credit: File

Vulcan Energy has signed an agreement with Stellantis – a deal representing France’s first joint project for the potential use of geothermal renewable energy to supply the global auto giant’s Mulhouse plant.

The deal is the fourth agreement between the two companies since 2021 as they aim to jointly produce clean, renewable energy for internal consumption at Stellantis’ manufacturing site. Based on current assumptions, Vulcan’s bold project could provide a significant portion of Stellantis’ industrial site’s annual energy needs by 2026.

The first phase of the joint project will include a pre-feasibility study for the construction of geothermal renewable energy assets for Stellantis’ facility, which will be carried out by Vulcan, while also assessing the potential for lithium production.

Vulcan’s core mission is decarbonisation, through renewable energy and carbon neutral lithium supply. Vulcan is here to support Stellantis, our largest lithium customer and one of our major shareholders, to decarbonise its operations in Europe. Vulcan Energy managing director and chief executive officer Dr Francis Wedin

Vulcan is developing integrated lithium chemicals and geothermal renewable energy production from its Zero Carbon lithium project in the Upper Rhine Valley in Germany and France. Uniquely, the project will produce clean geothermal power for its own use and for sale into the market, in addition to lithium hydroxide production.

The company’s model seeks to extract the sought-after battery metal from its lithium-laden hot brines percolating deep below in the picturesque Upper Rhine Valley that extends across France, Germany and Switzerland.

While more than 60 per cent of global lithium production is sourced from such brines, Vulcan’s competitive – and green – edge is that the heat at which these brines bubble to the surface is capable of generating power, courtesy of standard geothermal technology, with zero carbon emissions.

After extraction of geothermal energy and lithium, the brine is reinjected back into the bedrock to make a closed-loop process with minimal impact on the surrounding environment.

Subject to a successful pre-feasibility study, Stellantis and Vulcan aims to develop the project jointly on a 50:50 basis through more advanced studies.

The two companies previously signed a binding lithium hydroxide supply agreement in 2021, before an equity investment and a second binding lithium hydroxide supply agreement last year. Earlier this year, they agreed to a joint renewable energy project development term sheet for the carmaker’s Russelsheim plant in Germany.

In November, Vulcan announced plans to expand its business model into France and has applied for an exclusive lithium and geothermal license to secure another 480 square kilometres in the Mulhouse area.

The latest agreement with Vulcan marks Stellantis’ second potential use of renewable geothermal energy to decarbonise and localise its energy supply at an industrial site. The carmaker is the company behind such notable European brands as Fiat, Jeep and Chrysler.

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