Gina Rinehart ups stake in lithium-focused Vulcan

Gina Rinehart, the billionaire mining magnate who owns Hancock Prospecting, has boosted her ownership in Vulcan Energy Resources (ASX: VUL) to 7.5% by injecting nearly €12.5 million ($18.5 million) into the lithium-focused company. 

The strategic investment, via private placement, makes Hancock Prospecting the second-largest shareholders of Vulcan, which is working on a zero emissions lithium plant in Landau, Germany.

Rinehart is not the only one pouring millions into the lithium player. The Perth-based company said on Monday that CIMIC Group, Australia’s largest privately owned builder, and Melbourne’s wealthy Smorgon family have both invested in the company. CIMIC now owns a 6% in Vulcan after committing €25 million, while the Victor Smorgon Group has invested 2.5 million.

Last year, Rinehart thwarted Albemarle’s (NYSE: ALB) attempt to buy Liontown Resources (ASX: LTR) and blocked SQM (NYSE: SQM) from buying Azure Minerals. A few months later, she negotiated a partnership with the Chilean lithium miner and together the companies snatched Azures.

Shares in Vulcan Energy Resources rose 7.1% on Monday to close at A5.08 apiece in Sydney, valuing the company at A$874.1 million. They’ve traded in a 52-week range of A$1.95 to A$5.55. 

Powering half a million EVs

Vulcan said the placement was needed to help maintain project momentum as the funding will go towards early validation works for the engineering, procurement and construction management contract for the first phase of the Zero Carbon Lithium plant.

In April the company said it had proven the project’s ability to produce lithium chloride from a lithium extraction optimization plant. 

The Australian miner aims to produce in a fist-stage 24,000 tonnes of lithium hydroxide monohydrate per year, which is enough to power up to 500,000 electric vehicles (EVs) a year, according to Vulcan. 

Vulcan is targeting 24,000 tonnes of lithium hydroxide production capacity per year in phase one. (Image from: Vulcan Energy.)

Vulcan already has agreements to supply European carmakers including Volkswagen, Stellantis and Renault.

Direct lithium extraction is viewed as a promising production method because it significantly reduces the time required to convert lithium brine into a form that is suitable for battery manufacturing. 

The technology has faced widespread skepticism and remains relatively untested at commercial scale.

Vulcan’s demonstration production in Germany was the first instance of lithium chloride being sourced and produced within Europe. The project plans to utilize geothermal energy to power its plant, which will help reduce carbon emissions, the company said.