Cornish Lithium secures investment from UK Infrastructure Bank

Receive free Lithium updates

We’ll send you a myFT Daily Digest email rounding up the latest Lithium news every morning.

Cornish Lithium has secured its first investment from the UK Infrastructure Bank in a boost for the company and Britain’s hopes of creating a domestic mining industry for the metal, which is vital for the electric car transition.

“The funding package is expected to significantly accelerate progress towards the creation of a domestic supply of battery-grade lithium,” Cornish Lithium said in a statement on Tuesday.

It will help the start-up develop mines in south-west England and is a step forward in Cornwall’s plans to become a European hub for lithium supply. Lithium is used in batteries that power electric cars.

The $67mn investment — from state lender UKIB, US private investor the Energy & Minerals Group and existing shareholder US government-backed TechMet — could be followed by a second round of funding by the trio of up to $210mn.

The intervention by the UKIB, which contributed £24mn and was set up two years ago to draw private financing into climate projects, follows the growing importance among governments of securing supplies of critical minerals such as lithium.

The US, Canada, France and other nations have stepped up plans to boost critical mineral supply chains in an effort to challenge China’s dominance in the sphere.

“This investment supports plans laid out in the government’s critical minerals strategy by improving the UK’s domestic supply of lithium, which will help the UK’s transition towards net zero while boosting local and regional economic growth,” said Andrew Griffith, the UK’s economic secretary to the Treasury.

The UKIB, created to replace the European Investment Bank after the UK left the EU, made its first direct equity investment following an auditor warning to Cornish Lithium in June that it needed £10mn to continue as a going concern.

Jeremy Wrathall, chief executive of Cornish Lithium, said in a Financial Times interview that the $67mn would secure the company’s future for two years when the final investment decision to build what is expected to be its first lithium mining project Trelavour will be made.

Lithium — which has the potential to cause a supply chain bottleneck in the shift to EVs if demand outstrips supply — could also be critical in reviving Cornwall’s mining heritage and bringing growth to one of the poorest areas of the UK.

Privately held Cornish Lithium said its plans for the $244mn Trelavour project on a former China clay mine could generate about 8,000 tonnes of lithium hydroxide a year from late 2026, enough to satisfy 10 per cent of the UK’s demand for the metal by 2030.

That project alone could contribute £800mn to the local economy, the company said. A domestic source of lithium could also eventually support Indian carmaker Tata Motor’s planned battery plant in Somerset.

Wrathall said “a domestic source of lithium will strengthen the UK’s car manufacturing supply chain and improve its competitiveness”.

He added that the UKIB had not put any stipulations on lithium exports. For example, it had not ruled out exports to China.

Cornish Lithium is also planning to launch a share offering for up to £6.9mn for retail investors.

Cornish Lithium’s announcement coincided with Gary Nagle, chief executive of Swiss commodities trading group Glencore, saying lithium supply could easily be ramped up to meet demand.

“Lithium is abundant around the world and barriers to entry aren’t very high. We are not interested in buying lithium mines,” he said on a media call. “We like all the critical minerals other than lithium.”