04/02/2021 - 15:00

Rinehart invests in green lithium project

04/02/2021 - 15:00

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Local lithium play Vulcan Energy Resources has secured a cornerstone investment from Gina Rinehart's Hancock Prospecting, as part of a $120 million placement.

Rinehart invests in green lithium project
Gina Rinehart has participated in Vulcan Energy's $120 million capital raising.

Local lithium play Vulcan Energy Resources has secured a cornerstone investment from Gina Rinehart's Hancock Prospecting, as part of a $120 million placement.

Based in Perth, Vulcan is planning to become the world's first zero-carbon lithium producer for electric vehicles.

The company owns the Zero Carbon Lithium (ZCL) project in Germany's Upper Rhine Valley region, where it intends to produce both geothermal energy and lithium hydroxide.

A recent pre-feasibility study estimated the project would cost an initial €226 million (about $A356 million) to develop, while full-project CAPEX is expected to be €1.74 billion ($A2.74 billion).

The placement proceeds will be used to progress a final investment decision for ZCL, due mid-next year, which includes the acquisition of exploration data, permitting, and completion of studies. Funds will also go towards extensive lithium test work and development of pilot plants, Vulcan said.

Managing director Francis Wedin, also an ambassador of Better Futures Australia, said the placement was strongly supported by international and domestic institutions focussed on environmental, social, and corporate governance (ESG).

That included form Mrs Rinehart’s private agricultural and mining business, Hancock Prospecting, which owns Pilbara miner Roy Hill Holdings and 14 agribusiness properties across Western Australia and NSW.

Vulcan said it had also received significant investment from BNP Paribas' Energy Transition Fund.

“This demonstrates clear support for our strategic plan to develop the world’s first zero carbon lithium project,” Mr Wedin said.

“Proceeds from the placement provide us with a runway to final investment decision and enables Vulcan to accelerate project development, including targeted delivery of a definitive feasibility study by Q2 2022.”

Vulcan will issue about 18.4 million shares under the placement, priced at $6.50 each. Goldman Sachs and Canaccord Genuity are acting as joint lead managers, and New York-based EAS Advisors as co-manager.

Vulcan chairman Gavin Rezos intends to participate in the placement for $250,000.

The company emerged from a trading halt this morning, with its shares reaching a high of $9.52, up 21.4 per cent on Monday, before closing at $9 (up 14.8 per cent).

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