INTERVIEW: Cornish Lithium seeks policy clarity from UK government

Exploration and project development company Cornish Lithium says that the UK government needs to provide more clarity around its approach to domestic critical mineral projects to enable the country to strengthen its battery supply chains and capitalize on economic benefits associated with the renewable energy transition.

In a recent interview with SP Global Commodity Insights ahead of the UK's General Election, Cornish Lithium's Corporate Development Manager, Neil Elliot, said that greater clarity with respect to project permitting would help projects attract finance and expediate these projects towards full-scale commercial production.

Noting that the dialogue with the previous government had been frustrated by the regular reshuffling of ministers charged with overseeing the Department for Business and Trade and the Department for Energy Security & Net Zero, Elliot said that UK critical mineral projects were seeking something comparable to the EU's Critical Raw Materials Act that sets out a clear vision for the industry.

"Greater clarity around UK government policies towards domestic critical minerals would be helpful," he said.

"We've got the assets here that can support the supply of these minerals for UK consumers, so why wouldn't we want to use them and grow the UK battery supply chain."

Approved by the EU Council on March 19, the CRMA requires that EU capacities along the strategic raw material supply chain source at least 10% of mined material from the EU, process at least 40% of that locally and be made 25% from recycled material.

The regulation also requires that no more than 65% of the EU's annual consumption of each strategic raw material at any relevant stage of processing should come from a single third country.

It also seeks to increase domestic EU production of critical raw materials by identifying strategic projects that would benefit from faster permitting procedures and EU-facilitated financing.

"Looking at the CRMA, the EU has published out some fairly clear guidance in terms of how long funding applications should take," Elliot said.

"We don't necessarily have that degree of clarity in the UK," he said, adding that that a similar policy approach would be useful for the UK critical minerals industry.

Elliot said that Cornish Lithium was particularly eager for the UK government to provide a more straightforward permitting process that incorporates clear sustainability standards.

The sustainability of mining companies has become an increasingly important focus for investors, with access to capital now more frequently based on sustainability credentials.

"Anything that cuts down lead times is helpful but obviously we want to make sure that the ESG credentials are in place," he said.

"In addition, traceability legislation, such as the EU's Battery Passport, will help to demonstrate the provenance and environmental credentials of domestic sources."

Despite the lack of clear policies, Elliot noted that in August 2023 Cornish Lithium had secured a $67 million investment from a consortium of institutional investors including the UK Government backed UK Infrastructure Bank, US-based private equity fund The Energy & Minerals Group, and investment company TechMet.

The company has also received a number of government grants including a GBP1.8 million grant from Innovate UK through the Automotive Transformation Fund to help fund the construction of a demonstration-scale processing plant at its Trelavour hard rock lithium project in Cornwall.

Cornish Lithium is looking to develop two sources of lithium. The Trelavour Hard Rock Project has the potential to produce an average of 10,000 mt/year of lithium hydroxide over a 20-year mine life, according to a company estimates. Subject to the conclusions of the feasibility study, the company intends to build a commercial lithium extraction plant in Cornwall, with the production of lithium hydroxide expected to start in 2027.

In addition to Trelavour, Cornish Lithium is also developing a portfolio of geothermal brine projects across Cornwall utilizing Direct Lithium Extraction Technology.

Platts, part of Commodity Insights, assessed European lithium hydroxide at $12,700/mt CIF Europe on July 25, down 14% since the beginning of 2024.

National Wealth Fund

In an emailed statement to Commodity Insights, a spokesperson for the UK Department of Business and Trade said that a stable and resilient supply of critical minerals is crucial to grow the UK's EV industry and meet the country's net-zero targets.

"We are supporting our domestic critical mineral projects, from mining in the south-west to refineries in the north-east, and our Industrial Strategy will ensure businesses can depend on strong supply chains for the future," the spokesperson said.

The new government will continue to support and promote automotive innovation in the UK while resources from the National Wealth Fund will be used to support new gigafactories and unlock private investment, the spokesperson said.

A Labour manifesto pledge, the government's new GBP7.3 billion National Wealth Fund is aimed at supporting the UK's clean energy industries, strengthening energy independence and mitigating climate change.

The spokesperson added that the UK was also working with its international partners to "develop diverse and responsible sources of critical minerals for UK manufacturers."

The new approach from the government comes amid growing concern about an impending global shortfall in the supply of materials essential to lithium-ion battery production, including lithium, graphite, copper, cobalt and nickel.