The definitive feasibility study (DFS) for Phase 1 of the Zero Carbon lithium project, in Germany, has estimated a capital cost of €1.49-billion, up from the €700-million considered in the 2020 prefeasibility study, as ASX-listed Vulcan Energy increased the project scope.
The DFS is targeting 240 000 t/y of lithium hydroxide monohydrate (LHM) production, with more than 300 GWh/y of renewable power and more than 250 GWh/y of renewable heat production.
This was compared with the Phase 1 operation as envisaged in the 2021 study, which would have delivered 150 000 t/y of lithium hydroxide and 21 MW/y of energy. The PFS envisaged an enlarged Phase 2 project for a total cost of €1.74-billion, delivering 250 000 t/y of lithium hydroxide and 52 MW/y of power.
Vulcan Energy told shareholders on Monday that the DFS had resulted in a more than 250% increase in the project’s estimated net present value, which now stood at €3.9-billion pre-tax, and a near 40% increase in the estimated internal rate of return, which now stood at 34%.
Targeted revenues for the Phase 1 operation have increased by more than 200% on the prefeasibility study (PFS) estimates, to more than €700-million, with the earnings before interest, taxes, depreciation and amortisation margin now standing at 84%.
Operating costs have been targeted at €4 359/t LHM, making it potentially one of the lowest cost lithium operations, while the pay-back period has been estimated at three-and-a-half years, with first production targeted by the end of 2025.
“The Phase 1 DFS, backed up by technical data from our operating commercial geothermal wells and plant, and our operating lithium extraction pilot plants, shows compelling financial results, as well as world- leading target environmental metrics. Simply put, we are showing that with the right engineering, choosing a sustainable lithium production process can be a more profitable route than legacy methods,” said Vulcan MD and CEO Dr Frances Wedin.
“The work doesn’t stop here, it starts here, as we target start of production by end-2025 and ramp-up thereafter. This is a tight timeframe, and we recognise the significant challenge ahead of us as a growing company. To this end, we are rapidly transforming towards being a project execution and operations company.
“We have an exciting time ahead of us, with start-up of demonstration plants to train our operations team, start of development drilling for new production wells, and of course project financing.”
Phase 2 of the DFS will follow, targeting the addition of a further 240 000 t/y of production, consistent with the PFS.