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Investing in Lithium: Company Spotlight Vulcan (ASX:VUL)

Updated: Dec 12, 2022

Get ready to meet one of Bloom’s investment holding companies: Vulcan Energy Resources (ASX: VUL).

Vulcan Energy Logo

When it comes to investing your money into any business, it’s great to know where your money is going. Bloom is eager to bridge the gap between investors and businesses with our webinar series, bringing you face-to-face with the businesses you invest in.

The latest business we’re excited to host is Vulcan Energy Resources. But who is Vulcan? And what benefits are they bringing to sustainability?

Who is Vulcan?

With its ZERO CARBON LITHIUM Project at the forefront, Vulcan aims to be the first net-zero lithium producer worldwide. Vulcan is executing its plan to build a fully integrated renewable energy and battery-quality lithium chemicals project in Europe.

Vulcan’s geothermal and lithium divisions are leaders in their field and continue to realise significant project milestones. At a time when Europe, particularly Germany’s, reliance on Russian energy is being keenly felt, Vulcan stands committed to helping ensure Europe and Germany’s energy independence and security of supply of sustainably sourced battery metals.

Understandably, there is hesitation about sustainability around the word ‘mining’. Rest assured, Vulcan has joined the movement toward sustainable mining with minimal environmental impact.

What is lithium? And how can it be mined sustainably?

Lithium is a chemical required to create batteries for electric vehicles (EVs). And as the world transitions toward EVs, we’re going to need a lot of lithium.

Unfortunately, lithium mining methods aren’t sustainable, and these could emit approximately 1.05 billion tonnes of CO2 (source: if used to electrify everyone’s passenger vehicles. Vulcan is determined to avoid this with its Zero Carbon Lithium plan. This plan has no large open-pit mines, no large evaporation ponds, and no processing plants that run on fossil fuels.

Vulcan’s mining model will rely on renewable geothermal energy to power lithium extraction, and they will return the brine (salty groundwater) back into the ground for minimal environmental impact.

Here’s the Vulcan mining process in a bit more detail:

To collect lithium from brine, wells are drilled into underground reservoirs. Hot brine travels up these wells as steam and is used to turn turbines and generate electricity. The brine is then transferred to a direct lithium extraction plant, where the lithium is separated from the brine. The Brine is then returned to the reservoir for minimal environmental impact while the lithium is processed into higher concentrations before being sent to a nearby lithium plant. The lithium is then purified further to become battery-grade lithium for use in EVs.

The whole process is powered by the energy from the brine, with enough excess power to put back into the grid. 650,000MWH of energy will be produced, which can power 300,000 EVs in a year. This will lower the carbon footprint of EVs while also decarbonising the grid.

The demand for lithium in Europe is also predicted to double the current global demand by 2030 (source: Vulcan). But Europe doesn’t currently mine lithium, and it is forced to rely on unsustainable sources. Vulcan’s plant in Germany, which has the largest source of lithium in Europe, will provide a solution to this and the lithium necessary for millions of EVs. And when EV sales are predicted to grow 33% per year from 2021 to 2025 (Macquarie), it’s definitely a market you want to be a part of.

Why do we like Vulcan?

Vulcan’s commitment to supplying net-zero lithium is a game-changer for a sustainable future. It is expected that approximately 66% of the world’s automotive sales will include a lithium battery by 2030, and ensuring the materials they mine are net-zero will cut back on the overall carbon footprint during the production of electric and hybrid vehicles. The use of a prospective life cycle assessment (LCA) gives Vulcan Energy Resources strong foresight and will help reduce environmental impacts and make decisions regarding their scope 3 energy use and carbon footprint.

Here are the highlights of why Vulcan meets Bloom’s standard:

  • They are decarbonising the process of collecting lithium and leaving dirty mining practices in the past

  • They use geothermal energy to drive lithium production and reduce indirect emissions.

  • By 2024 they are projected to sell up to 40,000 tonnes of lithium batteries domestically and in Europe, which would support 1 million electric vehicles getting on the road.

With the Bloom Climate Impact Fund, you can invest in Vulcan Energy and make a direct climate impact here in Australia.

What to know more?

There’s a lot to be excited about regarding the future of the lithium market. So, if you want to hear more about the incredible Zero Carbon Lithium project that Vulcan is behind, be sure to watch the recording of our webinar with them:

And if you’re ready to dive into impact investing, download the Bloom Impact Investing App and start your green investment journey!

Please note:

This blog post has been prepared by Bloom Impact Investing to provide readers with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. We do not express any view about the accuracy or completeness of the information that is not prepared by us and no liability is accepted for any errors it may contain. The information contained in this blog is of a general nature only, does not take into account your objectives, financial situation, or needs, and is not to be taken into account as containing any personal investment advice or recommendation. No warranty is provided as to the accuracy, reliability, and completeness of the information in this publication and you rely on this information at your own risk. Any past performance information in the publication is not a reliable indicator of future performance.

Note: The Bloom Climate Impact Fund is an actively managed fund. Accordingly, the investments described in this article may not be an exact reflection of the Bloom Climate Impact Fund holdings.

The information in this post is prepared by Bloom Impact Investment Services Pty Ltd (ACN 651 965 098 AR 001294778), who is an authorised representative of Cache Investment Management Pty Ltd (ACN 624 306 430 AFSL 514 360) (Cache). Any financial products described in this post will be issued by Melbourne Securities Corporation Limited (ACN 160 326 545, AFSL 428 289), as disclosed in the relevant product disclosure statement. All information is general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant Product Disclosure Statement and Target Market Determination and consider whether the product is right for you and whether you should obtain advice from a professional financial adviser.


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