German lithium plant hopes to turbo-charge Europe's EV makers

FRANKFURT

As European automakers face stiff competition from China in the electric vehicle (EV) market, an Australian company is offering a solution to the critical lithium shortage with a new refinery in Germany.

Vulcan Energy's pilot plant, located west of Frankfurt, aims to extract lithium from briny underground water deep beneath the Rhine Valley. The company plans to supply lithium for batteries used by major auto manufacturers, including Volkswagen, Renault, and Stellantis.

"This is a really important part of Europe's critical raw material independence," Francis Wedin, a senior executive at Vulcan Energy, told AFP.

The refinery's innovative approach involves extracting lithium from geothermal reservoirs about two kilometers below the surface near the town of Landau. The process not only produces lithium but also generates excess heat that will be used to warm homes in the local community.

Commercial production is slated to begin in 2027, with the German government subsidizing the project to the tune of 100 million euros ($106 million). Vulcan Energy aims to produce 24,000 metric tons of lithium hydroxide annually, enough for half a million car batteries.

Vulcan Energy is not alone in its efforts. AMG Lithium opened a refinery in eastern Germany in September, targeting annual production of 20,000 metric tons, although it imports raw materials from Brazil.

The EU aims to ensure 40 percent of critical minerals are refined within the bloc and has taken steps towards this goal, including an agreement with Serbia to direct all its extracted lithium to Europe.

However, clean transport advocates warn that securing lithium supply is only one step towards European independence in battery manufacturing.

"If we want to be truly independent of other countries, every stage in the construction of batteries must take place in Europe," said Alina Racu, an expert at the NGO Transport & Environment.