Vulcan Energy Resources (ASX:VUL) shares rose more than 8% to climb as high as AU$8.60 in the morning, before easing back in afternoon trading. Other top gainers in morning trading included, MA Financial Group Limited (ASX:MAF) and Genesis Minerals Limited (ASX:GMD).
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Australia-based Vulcan Energy Resources is a renewable energy and metal company. The company has focused on producing geothermal power, a type of renewable energy. In the metal business, Vulcan has focused on producing lithium, a central material in the manufacturing of electric vehicle batteries. Lithium-based batteries are used to power electric cars and store energy from renewable resources such as wind and solar.
Vulcan updates on lithium production project
Investors rushed to purchase Vulcan shares today after the company provided an update on the progress of its lithium production project in Germany. Vulcan announced that it has begun the construction of the demonstration plant for its lithium project in the German town of Landau. The demo facility is scheduled to begin operations in early 2023. Vulcan explained that the operations personnel will use the demo plant to learn the process and its operations before the construction of the commercial plant.
Vulcan has focused on producing what it calls zero-carbon lithium. The strategy involves using geothermal energy in the extraction of the metal. The company is aiming to meet the growing demand for the battery metal in electric vehicle and energy storage markets.
The company has explained that its resource can help meet Europe’s lithium demand in the coming years. Although Europe is the world’s fastest-growing lithium market, it currently lacks local supply. While meeting demand for the important battery metal, Vulcan also hopes to reduce Europe’s reliance on foreign imports of lithium.
Is VUL ASX a good investment?
Investors have been flocking to lithium stocks lately and Vulcan Energy Resources has been among the favorites. VUL shares have gained almost 50% over the past three months. However, the stock is still more than 45% below where it was a year ago. Analysts see more upside in the stock. According to TipRanks’ analyst rating consensus, VUL stock is a Moderate Buy. The average Vulcan share price forecast of AU$19 implies about 125% upside potential.
VUL ASX stock is getting favorable mentions from financial blogs. TipRanks data shows that financial blogger opinions are 80% Bullish on VUL, compared to a sector average of 75%.
Final thoughts
Vulcan Energy Resources shares could be a great investment for those seeking exposure to renewable energy and lithium supply industries. Although Vulcan shares have already made huge gains in 2022, they still show significant upside potential.
