Vulcan Energy Resources Ltd (ASX:VUL) saw its stock price plummet by 8.17% during Wednesday's trading session, following an announcement of delays in its Phase One Lionheart project. The significant drop came as the company revealed it was extending the project's timeline to accommodate potential participation from the German government in funding the construction.

According to a filing with the Australian Securities Exchange, Vulcan Energy has pushed back its target for finalizing agreements and commencing full construction to the second half of the year. This delay is directly linked to the company's application for inclusion in the 1 billion euro German Raw Materials Fund, which aims to support projects that bolster the German domestic economy through long-term procurement of critical raw materials. The German government is currently conducting detailed due diligence on Vulcan's application.

The market's reaction suggests investors are concerned about the project's extended timeline, despite the potential for significant government backing. While the prospect of inclusion in the German Raw Materials Fund could provide substantial financial support and validation for Vulcan's project, the uncertainty and delays appear to have overshadowed this possibility in the short term. As the situation develops, investors will likely be closely monitoring any updates on the German government's decision and the project's revised timeline.