Arverne Group's Lithium Play: A Geothermal Gem in Europe's EV Battery Race

The energy transition is driving a global scramble for lithium, a critical ingredient in electric vehicle (EV) batteries and energy storage systems. As Europe races to secure its supply chains, Arverne Group is positioning itself as a pivotal player through a strategic move to strengthen control over its Lithium de France subsidiary—a project that marries geothermal energy production with cutting-edge lithium extraction. The upcoming June 18 shareholder meeting could unlock a re-rating opportunity for investors, as approval of a share swap with Hydro Energy Invest would cement Arverne's leadership in low-carbon lithium.

Why Lithium—and Why Now?

Lithium demand is projected to surge fivefold by 2040, fueled by EV adoption and grid-scale battery installations. Europe, however, imports over 90% of its lithium, creating a strategic vulnerability. The EU's Critical Raw Materials Act underscores the urgency to secure domestic supply chains, making projects like Arverne's Lithium de France a policy priority.

The Stake Swap: A Catalyst for Control

Arverne currently owns 63% of Lithium de France, with the remaining shares split between Equinor (25%) and Hydro (12%). The June 18 shareholder meeting will vote on a shares swap deal with Hydro Energy Invest, wherein Hydro would exchange its 12% stake for Arverne shares. If approved, Arverne's ownership would jump to 75%, solidifying its operational control and aligning with Equinor as a key partner. This move is critical:

• Scalability of DLE Technology: Lithium de France uses Direct Lithium Extraction (DLE) from geothermal brines in Alsace, a method that avoids the environmental footprint of traditional lithium mining. The project's pre-feasibility study (PFS) confirms it can produce lithium at costs in the top quartile globally, with 27,000 metric tons annually by 2031—meeting 33% of France's projected 2035 demand.
• Geothermal Synergies: The project's geothermal heat production (2.2 TWh by 2031) provides a dual revenue stream, reducing reliance on lithium prices alone. This diversification lowers risk and creates operational efficiency, as the heat extracted during lithium production can be sold to local industries.

The Merger: Fueling Growth with Capital

Arverne's recent business combination with Transition, a SPAC, has injected urgency into its expansion plans. The merger, finalized in early 2025, values the combined entity at €257 million and secures €148 million in proceeds through a PIPE (Private Investment in Public Equity). This capital will fund:
- €1.3 billion in investments by 2027, scaling up drilling, geothermal plants, and lithium facilities.
- €2.4 billion by 2030, targeting €800 million–€1.15 billion in revenue by then, with margins hitting 40–50%.

The merger also aligns Arverne with Berenberg's fairness opinion, which deems the deal fair to shareholders—a stamp of approval that could attract institutional capital post-approval.

Risks, but Manageable

Critics might cite regulatory hurdles, permitting delays, or lithium price volatility. However, Arverne's geothermal-adjacent business model mitigates lithium's commodity risk, while the EU's push for energy sovereignty creates a tailwind. Technical execution is another hurdle, but DLE's proven track record in pilot projects and Equinor's expertise in energy infrastructure provide reassurance.

June 18: The Crossroads

The June 18 shareholder meeting is a binary event for Arverne. Approval of the Hydro stake swap would:
1. Consolidate control over a project poised to meet Europe's lithium needs.
2. Signal investor confidence, potentially triggering a valuation re-rating.
3. Unlock financing, as banks and grant programs favor projects with clear ownership and scalability.

A Rare Opportunity in a Crowded Space

In a sector crowded with lithium plays, Arverne stands out for its geothermal synergies, top-tier cost profile, and alignment with EU policy. With EV battery demand surging and critical minerals shortages looming, this is a play on both energy transition and geopolitical resilience.

Act Before June 18

The shareholder meeting is a key catalyst for Arverne's valuation. Investors seeking exposure to Europe's lithium boom should position now. The stakes—literally—are high, and the rewards for early entry could be extraordinary.

Investment Thesis: Buy Arverne Group ahead of the June 18 vote. The shares swap, if approved, positions the company as a European lithium leader with geothermal diversification—a rare combination in a sector dominated by single-resource plays. This is a buy-and-hold opportunity for investors focused on the energy transition's next frontier.