Cornish lithium project lands £24m investment
A project to mine lithium in Cornwall has received a £24m boost.
The UK Infrastructure Bank has announced an equity investment to support Cornish Lithium in the development of the UK’s critical minerals supply chain.
The investment is the bank’s first equity deal and will help finance the creation of a domestic supply of lithium, which is crucial to the scaling up of battery production for electric vehicles and the development of battery energy storage – both key sectors in the UK’s transition to net zero.
The Bank’s involvement facilitated matched funding by The Energy & Minerals Group (EMG), a US-based private equity fund focused on the energy and minerals sectors.
Cornish Lithium’s existing institutional shareholder, TechMet, the energy-metals investment company, whose major backers include the US Government, is investing a further $7m ( £5.6m), bringing their total investment into Cornish Lithium to $30m.
The initial investment is part of a larger funding package of up to an additional £168 million potential second-stage financing, which is expected to provide the equity foundation necessary for the pioneering mineral exploration and development company to achieve commercial production.
The announcement signals a significant boost for Cornwall.
The project will enable the county’s development as an industrial cluster for lithium extraction and will strengthen the move to net zero in line with Cornwall’s local industrial strategy.
Once in commercial production, Cornish Lithium aims to build its 70-strong Cornwall-based workforce to over 300.
Through its hard rock mine development alone, it is estimated that Cornish Lithium could generate £800m of economic activity for the local economy over the planned 20-year mine life.
This figure is expected to increase further through the company’s geothermal waters project portfolio.
John Flint, chief executive of UK Infrastructure Bank, said: “Our investment in Cornish Lithium perfectly encapsulates a key part of our mission – to drive forward new and emerging markets that the UK will rely on to meet its net zero goals, and which will deliver an enduring and positive impact on local economies.
“Globally the supply of lithium is far outpaced by demand, and yet in the UK it remains a nascent market. Our investment has already crowded-in private sector financing which will greatly accelerate domestic production of a mineral which is critical to the future of EV battery production and decarbonisation of the transport sector.”
Jeremy Wrathall, founder and chief executive of Cornish Lithium, said: “Cornish Lithium has achieved its objective of defining world-class opportunities for lithium extraction in Cornwall from both lithium-enriched geothermal waters and from hard rock. It was therefore essential to secure funding from institutional investors with the financial muscle to bring our projects into commercial production. We are delighted to have secured investment from the UK Infrastructure Bank alongside EMG, as well as our much-valued partner TechMet.
“This funding will enable us to progress our Trelavour hard rock lithium project to a construction-ready status as well as completing the engineering design work required to build a demonstration-scale geothermal waters extraction facility. These project milestones are expected to generate a significant value uplift for all of our shareholders and create substantial benefits for the local community.
“As well as creating job opportunities1 and fostering innovation, the investment signals confidence in our ambitions and will drive forward the modern-day renaissance of Cornwall’s 4,000-year mining heritage. It is also a positive development for the UK’s automotive industry and green industrial revolution. A domestic source of lithium will strengthen the UK’s car manufacturing supply chain and improve its competitiveness whilst reducing the carbon footprint associated with the manufacture of batteries and electric vehicles.
“A significant amount of work over many months has gone into securing this funding and I would like to thank our team at Cornish Lithium for all of their efforts to bring this transaction to fruition in collaboration with the teams at the UK Infrastructure Bank, EMG and TechMet.
“It is exciting to now be able to share the news and look ahead to the next stage of our work. We are pleased to now give our existing shareholders the opportunity to vote on this ground-breaking deal for the UK economy and we look forward to providing them with more details about the General Meeting to approve the transaction and the Retail Offer in due course.”
Economic Secretary to the Treasury Andrew Griffith said: “I am delighted to see the £53.6m initial investment into Cornish Lithium, led by around £24m of funding from the UK Infrastructure Bank. 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 whilst also boosting local and regional economic growth.”