UK Looks to Push Ahead with Lithium Projects

Under its trade deal with the European Union, the UK will need domestic sources of battery materials. The EU trade deal’s rules of origin requirements says a certain percentage of finished goods, including an electric vehicle, contain products either “wholly obtained” or “sufficiently worked and processed” in the UK.  This rule creates a big opportunity for British lithium companies. Several companies have already started to look at different operational models.

Green Lithium this week selected Teesside as what could be the UK’s first lithium refinery. The refinery project allows for flexibility and is a proven model, as seen in China. But it also exposes the company to market forces, such as feedstock prices. The company hopes to minimize that risk by partnering with Trafigura, one of the world’s biggest commodity trading firms.

“Fulfilling this vision requires the right supply chain and investment partners. In Trafigura, we have found the perfect match in a company that not only has vast experience and expertise in the battery supply chain, but that is also willing to make a key equity investment to support Green Lithium in achieving its project objectives,” Green Lithium CEO Sargent said.

The prices of spodumene, currently at a record high of $5,750-5,900/t, up from just under $5,000/t in mid-May, is still a cause for concern for Green Lithium, even with Trafigura on board.

Other lithium startups have been looking at domestic mining.

Cornish Lithium’s brine extraction process is proven in theory, but there are no commercial projects of this type in operation.

“In my view, the best model for a successful lithium supply chain has to start with the raw material itself. The UK is lucky enough to have deposits of the raw materials — in a country that is familiar with mining — and should therefore try and exploit them,” Cornish Lithium chief executive Wrathall said.

Mining in the UK has been having difficulty obtaining permits and facing regular protests. Cornish calls for the British government to step up in order not to get behind China, the United States and the European Union.

What form of lithium should be produced is another question for British startups. Some OEMs plan to stick with lithium-iron-phosphate batteries (LFP), which use carbonate as they project hydroxide will be in short supply. However, with LFP, the UK will be in direct competition with China.

As the market moves towards solid-state batteries further on in the decade, lithium carbonate will be the product of choice for that market too. But much of the capacity being built out in Europe right now is for nickel-cobalt-manganese (NCM) batteries, which take hydroxide as a feedstock. While carbonate has a longer shelf life and is easier to produce and transport, hydroxide is premium for high-end batteries.

Tees Valley Lithium, which also has plans to develop a refinery based in northeast England, plans to produce hydroxide from lithium sulphate, a unique approach to processing lithium chemicals and a European first.

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