Lithium Prices Jump 50%, But Vulcan Energy Shares Keep Falling as €2.2 Billion Lionheart Loan Nears Finish Line

Despite lithium prices surging past 175,000 yuan/t, Vulcan Energy stock drops 46% from high as market awaits €2.2 billion financing closure for Lionheart project.

The battery-metal rally has handed Vulcan Energy a perfect tailwind. Chinese lithium carbonate prices have surged past 175,000 yuan per tonne — their highest level since 2023 — helped along by booming demand from data-centre battery farms that consume even more of the metal than electric vehicles. Yet the developer’s stock trades at €2.18, down almost 17% since the start of the year and a full 46% below its 52-week high.

That disconnect stems from one number: €2.2 billion. Vulcan needs to close a financing package of that size to bring its Lionheart lithium-geothermal project fully to life. Progress on the ground has been steady — but the market is waiting for signatures.

Drilling milestones pile up as plant rises in Frankfurt

Vulcan’s sixth geothermal well, LSC-2, has reached a target depth of 3,000 metres, with flow tests scheduled for the second quarter. The fifth production borehole, LSC-1, delivered flow rates between 105 and 125 litres per second. Two more wells are planned for 2026. Meanwhile, construction of the central chemical complex in Frankfurt’s Industriepark Höchst is underway, with first commercial production pencilled in for 2027.

Operational progress, however, has been overshadowed by the financing marathon. The €2.2 billion package consists of roughly €1.2 billion in senior loans and about €204 million in government grants. Thirteen lenders are involved, including the European Investment Bank, five export credit agencies such as Bpifrance and Export Finance Australia, and seven commercial banks — BNP Paribas, ING and UniCredit among them. The company targets closing in the current quarter.

Institutional backing builds as VanEck doubles down

Investor appetite for the equity side is strengthening. US asset manager VanEck Associates has lifted its stake to 6.06% of outstanding shares, equivalent to roughly 29 million securities. The move follows a €67 million equity injection from Siemens, which in return secured automation-technology orders worth a further €40 million through to 2035. Export Development Canada has also contributed a $232 million secured loan.

The company held €364 million in cash at the end of March, but its burn rate is steep. Vulcan consumed €76 million in operating cash during the first quarter alone, underlining the urgency of the pending facility.

Offtake contracts lock in 72% of output, but performance rights lapse

Long-term offtake deals with Stellantis, LG Energy Solution, LG, Glencore and Umicore cover about 72% of planned production, and the same proportion of agreed volumes carry fixed prices or price floors — a buffer against lithium volatility. Yet governance concerns surfaced ahead of the May 28 annual general meeting in Perth. Over 490,000 performance rights tied to management targets, including those of CEO Cris Moreno and CFO Felicity Gooding, have lapsed in the past two months.

Canaccord sticks with a buy rating

Analysts at Canaccord Genuity remain confident, reiterating a buy recommendation and a €4.45 price target — nearly double the current level. The stock’s annualised volatility stands at 76%, reflecting the binary outcome many investors see. Either the Lionheart financing closes soon, unlocking the project’s value, or the cash drain forces a more painful restructuring.

Vulcan’s AGM on 28 May will be the next flashpoint. The market expects a clear update on the funding timeline. Until then, the lithium rally alone won’t be enough to change the share price trajectory.