Australian miner strikes lithium in Germany

German-Australian mining start-up Vulcan Energy Resources is pushing to unlock enough lithium to power 400 million electric cars in Germany’s south-east.

Backed by Gina Rinehart’s company Hancock Prospecting, Vulcan Energy Resources is pushing to use geothermal energy to produce carbon-neutral lithium, pulled from deep beneath the Rhine River valley.

The company is targeting lithium from boiling spring water kilometres beneath the surface from an area 300km long and around 40km wide in the Black Forest, near the headquarters of both Porsche and Mercedes-Benz’s parent, Daimler.

Surveyed as one of the world’s largest lithium deposits, Reuters reported that the explorers have political favour because they would be reducing the German industry’s reliance on foreign lithium, particularly from China and Chile.

Most lithium for EVs is sourced either from Australia or Chile, but Vulcan Energy Resources has plans to spend €1.7 billion ($A2.65b) to build the lithium-extraction program.

The majority of the world’s lithium production comes from South America’s salt flats. Australia has plenty of lithium, but it is trapped in hard rock and its extraction is energy intensive. While Portugal is Europe’s leading lithium producer, it is not geared to automotive supply.

Vulcan Energy Resources told Reuters it plans to build up to five geothermal power stations to extract the sub-German lithium.

A statement from the company says it plans to use two sites to recover 15,000 tonnes of lithium-hydroxide a year by 2024, then 40,000 tonnes by 2025 onwards.

Coincidentally, 2025 is when the European car industry switches to even tougher emissions regulations that will all but mandate EV production for every car-maker.

The European Commission has estimated the automotive industry in Europe would need 18 times more lithium by 2030 and 60 times more by 2050.

“The lithium deposit we're talking about here is gigantic and its properties are ideal for our goal of producing high-quality lithium on a large industrial scale in Germany,” Vulcan Energy Resources co-founder Horst Kreuter told Reuters.

Australia is by far the largest lithium mining country in the world, with 42,000 tonnes extracted in 2019, compared to less than half of that (18,000 tonnes) in Chile. China ranked third with 7500 tonnes, followed by Argentina (6400 tonnes) and Zimbabwe.

Chile has the largest estimated lithium reserves in the world, according to Statistica.com, with 9,200,000 tonnes in brine-based lithium.

Australia ranks second (4,700,000 tonnes), Argentina third (1,900,000 tonnes) and China fourth (1,500,000 tonnes).

Four of the world’s 15 largest lithium miners are Australian, including Galaxy, Orocobre (which owns brine holdings in Chile in partnership with Toyota), Pilbara and Mineral Resources, whose main operations are near Kalgoorlie.

Others on the Top 15 list have significant local lithium holdings, including the world’s third biggest miner, China’s Tianqi Lithium. Tianqi Lithium owns a majority stake in Winfield Holdings, which operates Greensbushes – the world’s biggest lithium project – in Western Australia.