MAINZ, Germany — The German state of Rhineland-Palatinate has granted a five-year royalty exemption for lithium production, a move aimed at securing domestic supply of the critical battery metal until local capacity is built up.
The exemption, effective through Dec. 31, 2030, applies under section 32.2 of Germany’s Federal Mining Act. A review will take place one year before the exemption expires. The decision mirrors a similar state royalty exemption for geothermal production granted in 2009.
Vulcan Energy, an Australian-listed company with dual listing on the Frankfurt Stock Exchange, said its Lionheart Project in Rhineland-Palatinate will benefit directly from the exemption. The company is currently constructing upstream lithium and geothermal energy production facilities in the state.
“We welcome this lithium royalty exemption by the state of Rhineland-Palatinate, which follows the precedent set for geothermal energy royalties,” Vulcan Managing Director and CEO Cris Moreno said in a statement. “The actions of the state clearly align with those of industry, ensuring a path to deliver the resilience and competitiveness goals of Germany, along with those of the European Union’s Critical Raw Materials Act.”
The Lionheart project is designed as an integrated lithium and renewable energy operation targeting 24,000 tonnes of lithium hydroxide monohydrate annually — enough for about 500,000 electric vehicle batteries per year. The project is also expected to produce 275 gigawatt-hours of renewable power and 560 gigawatt-hours of heat annually for local consumers over an estimated 30-year lifespan.
The exemption was enacted through an amendment to the State Ordinance on Field and Extraction Royalties. State authorities said the measure is intended to encourage domestic production of critical raw materials for German and European industrial supply chains.
Vulcan Energy describes itself as building the world’s first integrated carbon-neutral lithium and renewable energy business. The company’s Lionheart project is located in the Upper Rhine Valley Brine Field between Germany and France.