VanEck Doubles Down on Vulcan Energy as Lionheart Financing Unlocks €2.2B for Construction

VanEck increases Vulcan Energy stake to 6% after Lionheart lithium project secures €2.2B financing. Construction begins, offtake deals with Stellantis, LG, Umicore.

The narrative around Vulcan Energy is shifting from "if" to "how" — and the market is starting to pay attention. A day after the Australian lithium developer confirmed the Financial Close for its Lionheart project, a major institutional investor has made clear it is not backing away. VanEck Associates increased its stake to 6.06% of outstanding shares, equivalent to roughly 28.96 million shares, up from 24.1 million shares — or 5.04% — reported in January. The buying spree continued through May 18, and the inclusion of Vulcan in the S&P/ASX 200 at the end of March has added further visibility among passive and active fund managers alike.

The Financial Close itself marks the point at which the €2.2 billion financing package — around A$3.9 billion — becomes fully accessible, subject to standard drawdown conditions. The package is structured across project, subsidiary and corporate levels and draws on commitments from 13 institutions, including the European Investment Bank, five export credit agencies and seven commercial banks. Among them are Bpifrance, Export Finance Australia, BNP Paribas, ING and UniCredit. Senior loans total approximately €1.2 billion, supplemented by around €204 million in government grants, and the entirety is now live for the construction phase.

The market reaction was telling. In Stuttgart, the stock initially spiked nearly 10% before closing at €2.66, only to retreat to €2.19 the following day. In Sydney, the shares jumped 8% to A$3.84 on Thursday, even as the broader Australian market edged lower. In Frankfurt, the stock opened 0.5% higher at €2.22. Yet the year-to-date picture remains bleak: a loss of 14.41%, with the current price of €2.23 still 44% below the 52-week high of €3.98. The technicals reflect this tension — the 200-day moving average sits at €2.60, a gap of over 14%, while the RSI at 10.6 signals a deeply oversold condition.

The centrepiece of the project remains Lionheart, Vulcan’s first production phase in the Upper Rhine Graben straddling Germany and France. The project is designed to produce 24,000 tonnes of lithium hydroxide monohydrate per year, enough for roughly 500,000 electric-vehicle batteries, alongside 275 gigawatt-hours of electricity and 560 gigawatt-hours of heat annually from geothermal sources over a 30-year lifespan. Offtake agreements are already in place with Umicore, LG Energy Solution, Stellantis and Glencore, covering six to ten years, with around 72% of volumes under fixed-price or price-floor arrangements.

On the operational front, drilling at the LSC-2 well has reached 3,000 metres depth, while flow rates at the LSC-1 production well are running at 105 to 125 litres per second. At the Industriepark Höchst site in Frankfurt, installation of a commercial electrolysis system is underway. The target is to start delivering 24,000 tonnes annually from the second half of 2028. A further drilling rig is being prepared by subsidiary Vercana for the second half of this year.

The Annual General Meeting provided its own drama. Shareholders approved the appointment of Roberto Gallardo, representing construction giant Hochtief, to the board. Hochtief bought a 15.4% stake in December for €169 million, cementing its role as a strategic partner as Vulcan transitions from developer to builder and operator. However, executive compensation became a sensitive topic. CEO Cris Moreno is to receive 355,745 performance rights — 111,170 short-term and 244,575 long-term — while CFO Felicity Gooding is in line for 296,454. A proposal to increase the annual compensation cap for non-executive directors from A$950,000 to A$1.2 million was also put to a vote. The advisory vote on the remuneration report came amid a backdrop of missed milestones: a total of 493,108 performance rights lapsed because conditions were not met, reducing potential dilution but underscoring operational delays.

The lithium market remains volatile but supportive. Chinese lithium carbonate prices rose to 200,500 yuan per tonne in mid-May before slipping to 177,000 yuan at month-end. Data centre energy storage demand is expected to grow 80% over the next five years, adding a structural tailwind. For Vulcan, the focus now rests entirely on execution — meeting drawdown conditions, keeping to the construction timeline and demonstrating that the €2.2 billion war chest translates into concrete progress on the ground. The oversold technical reading suggests some relief already priced in, but the real test begins now.