Vulcan Energy Commences Lionheart Construction as Lithium Rally and Institutional Support Build Momentum

Vulcan Energy starts building €2.2B Lionheart lithium plant in Frankfurt, secures financing from 13 lenders as stock lags despite lithium price rally.

The first shovels have hit the ground at Vulcan Energy’s flagship lithium conversion plant in Frankfurt’s Industriepark Höchst. Lionheart, the centrepiece of the company’s strategy to produce battery-grade lithium hydroxide from geothermal brines, entered its major construction phase in May 2026. The project carries a price tag of €2.2 billion and a timeline that will test both the company’s execution skills and investor patience.

That enormous financing package is not yet fully signed, but the pieces are falling into place. Thirteen lenders, including the European Investment Bank, are lined up, and a secured credit facility of $232 million from Export Development Canada has already been granted. Siemens has chipped in €67 million in equity, securing automation contracts worth an additional €40 million through 2035. The final project financing closure is expected within the current quarter, just as earthworks begin in earnest.

Institutional confidence is also showing up in share registers. VanEck Associates, the US asset manager, has increased its holding to 6.06%, representing nearly 29 million Vulcan shares. The move comes at a critical juncture: a company that is yet to book commercial revenue but is spending heavily on construction.

Phase one of Lionheart targets an annual capacity of 24,000 tonnes of lithium hydroxide monohydrate (LHM), enough to equip roughly 500,000 electric vehicles. The integrated geothermal facility will also generate 275 GWh of electricity and 560 GWh of heat each year. Construction is scheduled to take about two and a half years. While earlier company statements pointed to a commercial start in 2027, the current build plan targets 2028.

Vulcan’s stock price has not mirrored the optimism emanating from the construction site or the underlying commodity market. Chinese lithium carbonate prices surged past 175,000 yuan per tonne in May, reaching levels not seen since 2023 and marking a 50% gain year to date. Data centres represent a fresh demand driver, with their massive battery storage systems consuming more lithium than typical electric vehicles. Yet the Vulcan share price hovers around €2.17, down roughly 17% since January and 45% below its 52-week high of €3.98 set in October 2025.

The disconnect reflects lingering market scepticism over the smooth execution of Lionheart. On the operational front, the company can point to progress: the sixth well, LSC-2, reached its target depth of 3,000 metres, with flow tests slated for the second quarter. Cash reserves stood at €364.3 million at the end of March, and management says that is enough to fund more than 50 quarters of operations at current burn rates. The first-half 2025 loss per share was €0.14, typical for a developer in heavy investment mode.

Offtake agreements with Stellantis, LG and Umicore provide long-term revenue visibility, with 72% of contracted volumes at fixed prices or with price floors. Canaccord Genuity remains bullish, maintaining a buy rating and a €12 price target implying near-doubling from current levels.

Investors will have a chance to grill the board at the annual general meeting on 28 May. The key question: can Vulcan hold to its Lionheart schedule and deliver first lithium by 2028? The answer will determine whether the recent institutional buying is a smart bet or a premature one.

Meanwhile, the German government is doubling down on its raw materials strategy. The state-backed KfW-managed fund, which initially provided Vulcan with €150 million and helped unlock the €2.2 billion project, is set for a major expansion. From 2028, it may even be converted into a sovereign wealth fund. Vulcan already stands as the fund’s showcase European project — a role that carries both political backing and heightened scrutiny.