Australian-German start-up Vulcan Energy Resources said on Tuesday it has received €104 million ($122 million) in grants from the German government and two federal states to support its clean lithium project, as Berlin moves to boost electric vehicle (EV) battery production and reduce dependence on imported raw materials.
The funds, jointly provided by the federal government and the states of Rhineland-Palatinate and Hesse, are intended to help develop critical infrastructure for domestic lithium production. Vulcan said the initiative is part of a broader effort “to assist with building Germany’s and Europe’s critical raw materials supply chain resilience.”
“In times of increasing geopolitical challenges, it is necessary to intensify efforts … to open up alternative sources of raw materials for our domestic economy,” said Economy Ministry State Secretary Stefan Rouenhoff.
Germany’s demand for lithium, a key component in EV batteries, could reach 170,000 metric tons annually by 2030, according to the German Raw Materials Agency. Currently, most of the lithium used in Germany is imported from Australia, Argentina, Chile, and China. However, a study released in March by the Federal Institute for Geosciences and Natural Resources and the Fraunhofer IEG indicated that domestic reserves could potentially meet national demand for several decades.
Vulcan is investing €690 million in the project, which includes constructing a lithium extraction plant in Landau, Rhineland-Palatinate. The facility will produce lithium chloride, which will then be converted into lithium hydroxide at a separate plant near Frankfurt. Once operational, the site is expected to produce 24,000 tonnes of lithium hydroxide annually—enough to power approximately 500,000 EVs.
The grant funding will be disbursed over 36 months starting October 1. Approximately 30% of the state support will be co-financed by Rhineland-Palatinate and Hesse, according to the federal economy ministry.