£53m boost for Cornish Lithium

£53m boost for Cornish Lithium

Business news |
By Nick Flaherty

Cornish Lithium has raised £53.6 million ($67m) in a deal that could see a an additional £168m ($210m) of  backing. 

The funding for Cornish Lithium  follows a deal with local competitor British Lithium and Imerys in France for lithium supply in the UK. These deals are important for enabling a local supply of lithium for battery gigafactories such as the Tata plant in Somerset to supply Jaguar Land Rover.  

The initial investment in Cornish Lithium comes from a group of leading institutional investors led by the UK Infrastructure Bank alongside The Energy & Minerals Group (EMG) and TechMet. 

The funding is expected to significantly accelerate progress toward the creation of a UK supply of battery grade lithium compounds. The company has been working on extracting lithium from brine and from rocks.

Cornish Lithium is also raising an additional £7m from retail investors through Crowdcube, with priority for existing shareholders.

This is the first direct equity investment for the UK Infrastructure Bank which will invest approximately £24.0 million into the development of the UK’s critical minerals supply chain. EMG is matching this.

Cornish Lithium’s largest existing institutional shareholder, TechMet, the critical minerals investment company, whose major backers include the US Government’s Development Finance Corporation (DFC), is investing a further £5.6m, bringing its total investment into Cornish Lithium to US$30m.

The deal is part of a larger funding package of up to an additional £168.0m ($210m) potential second-stage financing. This is expected to provide the equity foundation necessary for the pioneering mineral exploration and development company to achieve commercial production. 

Once in commercial production, Cornish Lithium aims to build its 70-strong Cornwall-based workforce to over 300. Through its Trelavour hard rock mine development alone, it is estimated that Cornish Lithium could generate £800 million of economic activity for the local economy over the expected 20-year mine life. This figure is expected to increase further through development of the company’s geothermal waters project portfolio.

“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,” said Jeremy Wrathall, founder and CEO of Cornish Lithium. “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,” he said.

“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.”

“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. This model of investment is fundamental to the success of the UK’s transition to net zero,” said John Flint, CEO of UK Infrastructure Bank.

John Raymond, Executive Chairman of EMG, said: “EMG’s investment in Cornish Lithium further supports our continued focus on the development of the forward-facing commodities critical to the implementation of the aspirational goals of decarbonization. EMG is pleased to partner with the existing owners of Cornish Lithium as well as the UK Infrastructure Bank in this financing package for Cornish Lithium as it provides for sufficient capital formation necessary to achieve commercial production of what is envisioned to become a critical domestic supply source of lithium for the UK battery industry while contemporaneously advancing the economic development of the long-standing Cornish mining industry.”

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