Vulcan Energy's Lionheart Project Moves Off the Drawing Board as Mersen Deal Completes the Supply Chain

Vulcan Energy closes procurement with Mersen contract, breaks ground at Frankfurt site, and locks in blue-chip offtake deals for its 24,000-tonne lithium project.

The Oberrhein region is about to get a lot busier. Vulcan Energy has signed off on the final piece of its procurement puzzle for the Lionheart lithium project, marking the end of the planning phase and the beginning of the most capital-intensive chapter in the company's history.

The Last Piece of the Puzzle

French specialty materials group Mersen has been tapped to supply a conversion plant that will turn lithium chloride into battery-grade lithium hydroxide. The multi-million-euro contract closes out Vulcan's supply chain in Germany, following a comprehensive automation and building technology deal with Siemens for three core sites.

On the demand side, the picture is equally clear. Long-term offtake agreements are already in place with Stellantis, LG Energy Solution, Umicore and Glencore. For the first decade of production, roughly 72% of the contracted volume is protected by fixed or floor pricing, shielding Vulcan from the worst of any lithium price volatility.

Glencore's commitment is particularly striking. The mining and trading giant has signed up to take between 36,000 and 44,000 tonnes of lithium hydroxide over an eight-year period. That kind of anchor customer — combined with the other blue-chip names — dramatically de-risks Lionheart's revenue stream before a single tonne has been produced.

Dirt Turns in Frankfurt

The transformation from paper to physical reality is already underway. Vulcan has broken ground at Industriepark Höchst, one of Europe's largest chemical and energy hubs. Hesse's Minister President Boris Rhein and Frankfurt's Mayor Mike Josef attended the ceremony, underlining the political backing the project enjoys.

The production model is integrated: lithium chloride brine from the extraction plant in Landau will be trucked to Frankfurt and processed into lithium hydroxide monohydrate. The target capacity stands at 24,000 tonnes of battery-grade lithium per year — enough to equip roughly 500,000 electric vehicles.

The project has carried the status of a strategic undertaking under the EU's Critical Raw Materials Act since March 2025, a designation that has helped unlock both political and financial support.

Political Cover and a New Board Member

The state of Rhineland-Palatinate has thrown its weight behind the project by exempting lithium extraction from mining royalties under the Federal Mining Act through to the end of 2030. Every euro saved on these levies is a euro that stays on the balance sheet at a time when drilling preparations are gathering pace.

At board level, Hochtief is tightening its grip on the company. Roberto Gallardo, the construction group's chief strategy officer, has been appointed to Vulcan's board of directors effective April 1, 2026. The formal vote will take place at the upcoming annual general meeting. Hochtief, which invested €169 million in December, now holds roughly 15% of Vulcan's shares and manages construction and procurement through its Sedgman subsidiary.

The Cash Burn Begins in Earnest

Vulcan entered the year with €523 million in cash and equivalents. The total financing package, sealed in December 2025, comes to €2.2 billion and involves a consortium of 13 institutions including the European Investment Bank, BNP Paribas, ING and UniCredit.

Operating expenditure in the previous quarter stood at €7.2 million. That number is about to climb sharply. The main drilling campaign is scheduled for the second half of 2026, with work already running in parallel at the Schleidberg and Trappelberg sites. Management has been preparing the market for additional capital requirements to hit the 2028 production target, raising the prospect of dilution for existing shareholders.

The Frankfurt-listed shares jumped nearly 5% on the groundbreaking news, hitting €2.38 and breaking through both the 100-day and 200-day moving averages in a single session. At the end of March, the stock was still trading roughly 30% below the 200-day average. Trading volume surged to around three million shares, about a million more than in the prior session.

What Comes Next

Vulcan will publish its March-quarter report on April 29 — the first set of numbers since construction began. The cash flow statement will reveal how quickly the company is deploying its funds for phase one of Lionheart.

CEO Cris Moreno will address shareholders at the annual general meeting in Perth on May 28, where the 2028 production target is expected to face its first serious scrutiny of the year. The backdrop is supportive: battery-grade lithium hydroxide was trading in Europe at just under $20,000 per tonne.