UK backs lithium refinery to build domestic battery supply chain

Teesside lithium refinery planned to produce 25,000 mt/year of battery-grade hydroxide

Tees Valley Lithium plans to produce 25,000 metric tons/year of battery-grade lithium hydroxide at a first-phase refinery in Billingham, northeast England, under a government-backed push to establish a domestic lithium supply chain.

The £185 million project, which could eventually be expanded to 100,000 mt/year, is expected to support around 1,700 jobs across operations, construction and the supply chain, the UK Department for Business, Innovation, Science and Trade said on Sept 29.

The government said it had helped unlock nearly £230 million in private investment in lithium projects in Cornwall and Teesside. TVL's investment is supported by up to £18.3 million in government grant funding offered in principle, announced earlier this month.

The Billingham refinery is intended to process lithium feedstock from Cornwall, where Geothermal Engineering Ltd plans to extract lithium from geothermal brine. GEL's project will produce technical-grade lithium carbonate, which must be further refined into battery-grade chemicals before it can be used in battery manufacturing.

TVL has signed a memorandum of understanding with GEL to link the two projects, creating a proposed domestic supply chain from lithium extraction in Cornwall to battery-grade refining in Teesside.

"Britain can mine lithium, but it cannot put that lithium into a battery without refining it," Vikki Jeckell, Chief Executive of TVL, said. "Government has now backed both halves of that equation. Cornwall supplies the resource, and Teesside turns it into battery-grade material. That is what a sovereign supply chain looks like."

The government expects UK lithium demand to increase by 1,100% by 2035 as automakers transition to electric vehicles. Most battery-grade lithium chemicals used in Europe are currently refined outside the region, highlighting the strategic importance of developing domestic conversion capacity.

Platts, part of S&P Global Energy, assessed CIF Europe battery-grade lithium carbonate at $18,000/mt on Sept. 28, stable day over day and down $500 week over week. Lithium hydroxide was assessed at $18,500/mt, unchanged day over day and week over week.