UKIB invests £24M into firm constructing lithium extraction mine in Cornwall

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Part of a larger funding package worth £53M in conjunction with the Energy & Minerals Group and TechMet, the financing will help support Cornish Lithium in the development of the UK’s critical minerals supply chain.

This investment represents UKIB’s first equity deal and will help finance the creation of a domestic supply of lithium, which is crucial to the development of battery energy storage and the scaling up of battery production for electric vehicles. Both of these sectors expanding is necessary for the UK’s transition to net zero by 2050.

Cornish Lithium owns a hard rock exploration project at Trelavour Downs near St Dennis which repurposed a former kaolin pit with lithium present in minerals within the granite.

It is also developing a lithium extraction plant backed by the government’s Getting Building Fund. The pilot plant will use lithium extraction technology to mine lithium from geothermal waters at the United Downs Deep Geothermal Power Project near Redruth.

This initial investment is part of a larger funding package of up to an additional £168M 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.

UKIB hopes 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.

UKIB chief executive John Flint 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.”

Cornish Lithium founder and chief executive Jeremy Wrathall 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 opportunities 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 UKIB, 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.”

Secretary of state for energy security and net zero Grant Shapps said: “Today’s investment in Cornish Lithium is a strong vote of confidence in the South West’s future at the cutting edge of electric vehicle technologies.

“Coming hot on the heels of Tata’s investment in its gigafactory in Somerset last month – one of the largest investments ever in our automotive sector – this planned expansion will be a key part of ensuring a domestic supply of lithium that is so vital to developing batteries and battery storage here in the UK. And all of this will support our move towards a cleaner energy future, grow our economy and create new jobs, while also boosting our energy security.”

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