Yahoo Finance Cornish lithium hunt makes funding breakthrough in bid to power electric cars
Cornish Lithium has secured an £18m investment to speed up the development of its mining projects as the UK attempts to wean itself off a reliance on Chinese minerals.
The mineral exploration firm, founded in 2016, said the funds from TechMet, which backs technology metals projects globally, will allow it to hunt for lithium reserves in further locations and investigate the potential for extracting geothermal energy from its boreholes.
It comes as Britain tries to build up its lithium mining sector and reduce imports of the rare metal from abroad, predominantly from China.
Demand for lithium, which is used to make batteries for electric cars, is predicted to grow ahead of a ban on vehicles using petrol and diesel from 2030. It is also used in digital devices including smartphones.
When questioned in parliament on Wednesday about security concerns over importing critical minerals used in tech products from China, prime minister Boris Johnson cheered the expansion of the UK’s lithium mining sector.
“There are some very interesting and potentially very lucrative sources of minerals such as lithium in this country, whose exploration, discovery and reuse we are encouraging,” he said.
“We are going to use freeports to ensure that we support them as hubs for the processing of those critical minerals here in the UK.”
Cornwall is home to prodigious reserves of the lightweight metal, according to geological surveys, setting up the region as a key player in Britain’s green industrial revolution.
As it stands, ruins of long-abandoned factories and towering chimney stacks along the Cornish coast are some of the only visible hints of the region’s industrial past. But while the county’s prospectors have been consigned to the history books, Cornish Lithium’s fresh funding may signal a significant move towards their revival.
Based in Penryn, Cornish Lithium set up a flagship exploratory mine known as United Downs in 2019 near Redruth – a town once known as the “richest square mile in the world” – as well as another key project near the village of St Dennis.
The deal announced on Thursday is its first ever backing from a financial institution – a milestone for the British firm.
Founder and chief executive Jeremy Wrathall describes it as an “inflection point” that “validates the extensive work we have completed in Cornwall”.
South African mining magnate Brian Menell, who set up TechMet, says his investment represents a bet that Cornish Lithium is set to become “a cornerstone of the UK’s battery metal supply chain”.
Though Cornwall is better known for its tin, gold, silver and copper mining – featured in the Poldark novels and television series – lithium was first discovered 1864 by Professor William Allen Miller of King’s College in London. Even then he argued “it may prove of great commercial value”.
Now, as more concentrations of the metal are found, that prediction looks prescient. Cornish Lithium and competitors such as Geothermal Engineering are jostling for a slice of what could be a lucrative opportunity.
Geothermal Engineering believes it could produce 4,000 tonnes of lithium a year by 2026, making up a chunk of the UK’s potential annual demand of about 59,000 tonnes by 2035.
It comes as manufacturers are racing to secure resources needed to make the lithium-ion batteries that will power their electric replacements.
Research house the Faraday Institution predicts that global battery demand will rocket from a current level of around 110 gigawatts per year to more than 6,500 gigawatts by 2050.
To deliver this, around 75,000 tonnes of lithium carbonate equivalent will be needed for the UK’s share alone and 2,500,000 tonnes globally.
Cornish Lithium argues the reserves underneath Cornwall are “globally significant”, thanks to a huge layer of granite running from the Isles of Scilly in the west to Dartmoor in the east.
Some of the rock is immersed in saline water, meaning it can be pumped to the surface.
The company, which has mineral rights for more than 300 square miles of land, says it is developing ways of extracting the lithium from the rock itself and from geothermal waters. It argues that using geothermal energy could potentially make its methods the “most environmentally-responsible way to produce this critical battery metal”.
The firm poured over geological data and spoke to former Cornish miners before digging boreholes at its flagship project and, following positive findings, is now examining which technologies will be best for getting the lithium out of the water.
It is also looking at establishing “hard rock” mines that combined could create hundreds of jobs.
One of these could be at its Trelavour project, located near St Dennis and St Austell, for which it is seeking to establish viability.
But the question remains over whether an £18m injection of cash is enough to push this fresh industry towards reality.
The money will come in two waves – the first half following shareholder approval, while the second half will be unlocked if the findings of the study at Trelavour are positive, when it completes by the second quarter of next year.
Meanwhile, rival British Lithium has also been exploring nearby but is only looking at the potential for hard rock mines.
The firm, based in St Austell, began its fourth round of drilling earlier this year and expects to shift to full scale production, should its efforts prove fruitful, within three to five years – creating as many as 350 jobs directly and more in the supply chain.
It could deliver a much-needed jump start to the Cornish economy, built on mining and fishing but now dependent on tourism.
Cherilyn Mackrory, the Tory MP for Truro and Falmouth, has said the county has become too reliant on the tourism sector and that she wants it to diversify.
“We want a different Cornwall that isn't reliant on handouts,” Mackrory told the BBC earlier this year.
With Cornish Lithium promising that a “new dawn” is soon coming, locals may dare to hope that their industrial roots need not be a thing of the past.
