Cornwall’s mines once helped power Britain’s industrial revolution, before most shut down in a region that is now one of the poorest in the UK.
But several companies are now hoping the area of south-western England can mount a revival and capitalise on what is expected to be a global scramble for a metal that will be key to the energy transition: lithium.
This month, more than 150 years after the resource was first discovered in the region, Cornish Lithium unveiled a demonstration plant that could eventually produce a considerable chunk of the UK’s supply.
Despite a slump in the price of the metal, several companies are looking to get ahead in the race for lithium, which is used in the production of smartphones and electric vehicles.
Rio Tinto this month announced plans to acquire Arcadium Lithium, in a deal that will make it the third-largest producer of the metal.
General Motors is also pumping almost $1bn into a US lithium mine, in the belief that a price slump caused by a glut of supply and weak EV sales will not persist.
Jeremy Wrathall, chief executive of Cornish Lithium, which has raised £98mn since it was founded in 2016, said he was confident about the long-term prospects for lithium even though current low prices were a concern.
“This is always the scariest time but [also] the best time to invest because you know it [the price weakness] is unsustainable,” he said. Rio Tinto “must be seeing what we think we can see”, Wrathall added.
Nations worldwide are scrambling to secure access to the critical minerals needed to meet net zero targets. The world will face a global supply gap of 1.4mn tonnes of lithium by 2040, according to data company Benchmark Mineral Intelligence.
Many countries are also pushing to reduce their dependence on China, which dominates the supply chains for many critical minerals.
In the UK, industry and government interest in shoring up supply chains has encouraged a range of companies to invest in a domestic lithium sector, with carmakers Nissan and Jaguar Land Rover-owner Tata developing battery factories.
But experts say the development of a domestic industry faces challenges that include insufficient government incentives, high energy prices and a slow planning system.
It would be “hard to justify spending 100s of millions unless there’s some sort of government help, with either a guaranteed price for the product or further investment,” said Nigel Reed, a former city analyst and an early investor in Cornish Lithium.
Lithium can be mined from rocks or extracted from brines, or salty water, such as those found in salt lakes in South America.
The UK will need 135,000 tonnes of lithium carbonate equivalent by 2040 for domestic battery production, up from 25,000 tonnes in 2025, according to the Faraday Institution research group.
Britain has no commercial-scale lithium mines at present. But the Advanced Propulsion Centre, which seeks to accelerate the energy transition, has estimated the nation could produce around 56,500 tonnes by 2030.
Cornish Lithium — which wants the government to set a target for domestic production of 50,000 tonnes per year — hopes to jump-start UK production by extracting lithium from granite and from the underground brines that run between cracks in the rocks in Cornwall.
The company, which reported an £8.6mn loss last year, is aiming to produce 25,000 tonnes a year by 2030, enough to supply more than 500,000 electric cars.
But lithium prices have crashed by more than 50 per cent in the past 12 months and are currently around half the $20,000 level that Cornish Lithium said was needed to create the incentive to develop new supplies. The company expects its granite mining project to be profitable below that level, but did not disclose at what price.
Imerys British Lithium, a joint venture between the French multinational and the UK start-up, plans to produce 21,000 tonnes of lithium per year by 2030 in a neighbouring Cornish mining project that is expected to cost around £575mn.
Cornish Lithium’s demonstration plant will produce samples of lithium hydroxide for customers such as carmakers, and the company is finalising a study that will outline the cost of scaling up its granite mining operation.
Chief financial officer Varshan Gokool said costs would be higher than the $243.8mn in capital expenditure estimated in 2022, partly due to inflation.
US-government backed investor TechMet, the UK’s National Wealth Fund and private investor the Energy & Minerals Group ploughed a combined $67mn into Cornish Lithium last year, which they said could be followed by a second round of up to $210mn.
Brian Menell, CEO of TechMet, said the project’s lithium would not “be at the bottom of the global cost curve but it won’t be at the top either”.
Getting the lithium out is only the start of a complex supply chain, with experts stressing the need for the UK to invest in mineral processing and recycling to grow a domestic industry.
While much mining occurs in Australia and South America, “you need to worry about the refining and the battery manufacture” to reduce dependence on China, said Colin Church, CEO of the Institute of Materials, Minerals & Mining.
Many lithium miners ship their material to processors in China, where it is converted into lithium hydroxide or carbonate that is then bought by carmakers.
“Digging it out of the ground and shipping it somewhere else isn’t increasing your security of supply,” said Jeff Townsend, founder of the Critical Minerals Association.
Cornish Lithium plans to produce lithium hydroxide, in what it says would be a first in the UK. The Imerys joint venture also plans to process on site and sell lithium carbonate. Meanwhile, Tees Valley Lithium and Green Lithium are aiming to build refineries in the UK.
Barriers to the development of a lithium industry include a lack of skilled workers, high energy costs and slow planning processes, experts said. More government money was also essential “given the competitive global market for investment”, said think-tank Green Alliance.
The government said it would “engage closely with industry to realise our potential for producing critical minerals domestically”.
Evove, which is developing technology to extract lithium from brines, said securing investment in the UK was a challenge and the company was turning to US-based funders. The company has raised £20mn and is targeting a $50mn round next year.
“The UK is great for starting off,” said chief marketing officer Andrew Walker, “but scale is an American thing.”
Extracting lithium from brines
Cornish Lithium and rival UK group Northern Lithium plan to extract the mineral from brines using a nascent technology known as “direct lithium extraction.”
Experts said the energy-intensive process was used in China but there were few projects using it elsewhere.
Kathryn Goodenough, principal geologist at the British Geological Society, said long-term production forecasts could be challenging because “the brines can move” and it was difficult to predict how quickly they would be “recharged” with lithium.
Cornish Lithium plans to extract brine at a series of small sites, each of which would require around £30mn in capital expenditure and could cumulatively produce 15,000 tonnes by 2030.
LevertonHelm, which produces lithium chemicals in the UK, said it would ideally take “all the material that’s produced from Cornish’s [brines] project.”
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