Vulcan Energy (ASX:VUL) has reached a major milestone with the start of civil construction activities at the Lionheart 30MW geothermal power plant site in Germany.

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The power plant is a central part of a project that will combine geothermal energy generation with lithium extraction, with the aim of producing renewable, baseload geothermal power and high-quality lithium chloride.

The start of civil work follows early bulk earthworks at the site and comes ahead of the next construction phase, which will involve the erection of buildings and the arrival of process equipment for assembly.

Civil construction activities include the preparation and construction of key foundations and concrete works for the power plant buildings and equipment, as well as road infrastructure.

Vulcan managing director and chief executive officer Cris Moreno said Lionheart, the company’s first phase of production, is a lighthouse project for Europe’s energy and critical raw material resilience.

The project involves an integrated lithium and renewable energy development targeting annual production of 24,000 tonnes of lithium hydroxide monohydrate (LHM), enough for about 500,000 electric vehicle batteries per year, along with a co-product of 275 GWh of renewable power and 560 GWh of heat per year for local consumers over an estimated 30-year project life.

“We are delighted to move beyond preparatory bulk earthworks and into civil construction activities at our Lionheart geothermal power plant, an integral part of the Lionheart integrated lithium and geothermal project. By producing our own baseload heat and power, where excess heat will be sold to local consumers, Lionheart is able to deliver low-cost lithium production with significant insulation from high energy prices now and in the future,” Mr Moreno said.

“It is encouraging to see Lionheart project execution progress on time, and on budget – a great start with our project partners. Step by step, we are building cost-competitive lithium production for Europe, and we look forward to keeping our shareholders abreast of further progress as the project develops.”

Vulcan said it is building the world’s first carbon-neutral, integrated lithium and renewable energy business to decarbonise battery production.

Lithium will be extracted from low-impurity geothermal sub-surface brines using Vulcan’s VULSORB technology. The naturally heated brine powers the production and conversion of lithium into battery-quality material while also creating a renewable energy co-product for use in operations, with surplus sold into the local energy market. Vulcan said this integration, together with the technology and favourable brine chemistry, is expected to support one of the lowest-cost lithium operations globally.

Moreno said extraction is only the starting point.

“Vulcan has reimagined mining using innovation to integrate and capture more of the value chain. Vulcan has made its positive final investment decision on Lionheart; construction is underway, offtake contracted, and further phases are in planning,” he said.

For investors and industry watchers, the construction step matters because it moves Lionheart further from project planning and into on-site execution, while keeping attention on how the integrated geothermal and lithium model is rolled out in the next phases.

VUL was up 1.54% at $2.63, giving the company a market capitalisation of $1.239 billion.

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