The Lithium Alliance That Could Power Europe’s Batteries

Vulcan Energy secures long-term agreement with Glencore, backing German lithium project and lifting confidence in local battery supply

14 Oct 2025

Europe’s effort to build a domestic lithium supply chain has moved closer to commercial reality after Vulcan Energy agreed a long-term offtake deal with Glencore, linking geothermal lithium production in Germany directly to the global battery materials market.

The eight-year agreement covers between 36,000 and 44,000 tonnes of battery-grade lithium hydroxide from Vulcan’s planned project in the Upper Rhine Valley. The companies did not disclose pricing but said they had agreed pricing mechanisms, giving both sides commercial certainty. The volumes are expected to underpin Vulcan’s first phase of development.

The Upper Rhine Valley, which hosts deep geothermal brines, has become a focal point for Europe’s ambitions to secure locally produced battery materials. The agreement signals that projects based on this resource are moving beyond pilot stages towards industrial scale.

Vulcan plans to extract lithium from underground brines while generating renewable geothermal power, a model designed to meet Europe’s tightening environmental standards. The company is targeting the start of commercial production around 2028, with customer qualification expected in 2029.

For Europe’s lithium sector, long-term offtake agreements have become critical. Many projects have struggled to advance as investors and lenders seek firm commitments from buyers. By securing a deal with a large, diversified commodities group, Vulcan strengthens its position with financiers, regulators and policymakers.

Glencore’s interest reflects broader pressures across the battery industry. European manufacturers face stricter rules on carbon footprint, traceability and supply chain resilience. Lithium produced locally using renewable energy offers a way to address all three requirements.

The agreement also points to growing confidence in direct lithium extraction, or DLE, a technology that aims to recover lithium from brines with a smaller environmental footprint than conventional mining. While large-scale European DLE projects have yet to build long operating records, a binding offtake suggests buyers are increasingly willing to back the technology.

Significant challenges remain, including permitting, construction and execution risks. But as demand for electric vehicles grows and Europe seeks to reduce reliance on imported materials, deals of this kind are likely to become more common. Europe’s ambition to source lithium at home is beginning to take shape on a defined commercial timeline.