Vulcan Energy Resources (ASX:VUL) partnered with German-based chemical producer BASF to develop a renewable geothermal heat project and potentially build a commercial lithium extraction plant in Germany, according to a Thursday filing with the Australian bourse.

The company will develop and operate the heat and lithium production facilities while retaining 100% ownership of lithium production, the filing said.

The company and BASF will jointly fund the first phase of the geothermal exploration, with BASF being the heat offtaker for 100% of the energy if successful, according to the filing.

Shares rose 4% in morning trade Thursday and earlier hit a new 52-week high.

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