Cornish Lithium secured its first investment through the UK Infrastructure Bank, a major boost to the company as well as Britain’s hopes for a domestic mining sector for this metal that is crucial for the transition to electric cars.
Cornish Lithium, in a Tuesday statement, said that the funding package would “significantly accelerate” progress toward creating a domestic lithium supply for battery grade.
The deal will allow the new company to develop mines in South-West England, and it is a major step in Cornwall’s plan to become an European hub for Lithium. Batteries that power electric vehicles use lithium.
The $67mn from the state lender UKIB and the US private investor Energy & Minerals Group, as well as existing shareholders US government-backed TechMet could be followed up by a second funding round by the three of up to $200mn.
The UKIB’s intervention, which provided £24mn, was established two years ago in order to attract private funding into climate projects. This follows the increasing importance of governments securing critical minerals like lithium.
In an effort to counter China’s dominance, the US, Canada and France have intensified their plans to improve critical mineral supply chain infrastructure.
This investment will support plans laid out in government’s crucial minerals strategy, by improving UK’s supply of lithium. It will also help UK’s transition to net zero, while boosting regional and local economic growth,” said Andrew Griffith.
After an auditor warned Cornish Lithium that they needed PS10mn in order to remain a viable business, the UKIB made its first direct equity investments.
Jeremy Wrathall said that $67mn will secure Cornish Lithium’s future in two years, when the final decision on investment to build its first lithium mine project Trelavour is made.
The lithium, which could cause a bottleneck in the supply chain if the demand for EVs exceeds the supply, can also play a crucial role in revitalizing Cornwall’s rich mining history and helping to bring growth to Cornwall.
Cornish Lithium, a privately held company, said that its plans for a $244 million Trelavour project at a former China Clay mine would allow it to produce 8,000 tonnes per year of lithium hydroxide by late 2026. This is enough to meet 10 percent of the UK demand for the metal in 2030.
The company stated that this project could alone contribute £800mn in local economic activity. The company said that a domestic source of Lithium could eventually be used to support Tata Motors’ planned Somerset battery plant.
Wrathall stated that “a domestic lithium source will strengthen the UK car manufacturing supply chain, and improve its competitiveness”.
He said that UKIB has not imposed any restrictions on exports of lithium. It had not, for example, ruled out the export of lithium to China.
Cornish Lithium also plans to launch an offering of up to 6.9 million pounds sterling for retail investors.
Gary Nagle’s announcement of Cornish Lithium coincided with Gary Nagle Chief Executive Officer of Swiss commodities trading company Glencore saying that lithium supply could be easily ramped up in order to meet the demand.
“Lithium can be found in abundance around the globe and entry barriers are not very high. He said in a press call that we are not interested to buy lithium mines. “We are interested in all critical minerals except lithium.”