Cornish Lithium's wholly owned Trelavour hard rock lithium project is enjoying strong support from both private investors and the UK government as the company prepares to deliver an initial feasibility study for the project, CEO Jeremy Wrathall told S&P Global Commodity Insights in a recent interview.
According to company estimates, the Trelavour project, located in the St Austell area of Cornwall, has the potential to produce an average of 10,000 mt/year of lithium hydroxide over a 20-year mine life. Following the completion of the feasibility study, expected by June, Cornish Lithium plans to establish a commercial lithium extraction plant in Cornwall, with production anticipated to commence in 2027.
In addition to Trelavour, Cornish Lithium is actively developing a portfolio of geothermal brine projects across Cornwall, employing direct lithium extraction technology. The company aims to produce 25,000 mt/year of lithium carbonate equivalent by 2030, which could fulfill approximately 25% of the UK's projected lithium consumption.
Wrathall said that the project has been buoyed by its recent designation as a Nationally Significant Infrastructure Project by the UK government, acknowledging its importance as both a likely driver for regional and national economic development and its status as a strategic source of lithium hydroxide for the UK battery industry.
Describing the designation as "hugely supportive," Wrathall emphasized that it provides clarity and certainty under the UK Planning Act 2008, streamlining the permitting process.
"We are delighted with this designation as it allows us to move ahead rapidly with the permitting process," he said, adding that environmental baseline studies for the project are already well advanced.
Wrathall said that this designation reflects the government's commitment to ensuring a domestic supply of critical minerals, which is essential for achieving the country's net-zero goals and bolstering a competitive battery manufacturing sector. Local politicians have also expressed strong support, recognizing the opportunities presented by Cornwall's significant mineral and geothermal resources.
"Local MPs of all backgrounds, particularly from Labour, see Cornwall's future integrally tied to critical minerals extraction and renewable energy sources," he said.
The company has secured several government grants, including a GBP1.8 million ($2.35 million) grant from Innovate UK through the Automotive Transformation Fund, which has facilitated the construction of a demonstration-scale processing plant at the Trelavour site. Inaugurated in October, this plant will enable Cornish Lithium to optimize its extraction processes and provide high-grade samples to battery manufacturers.
With commissioning underway, the company plans to begin shipping lithium hydroxide samples to potential offtake partners in early 2025.
While the project continues to enjoy strong government support, Wrathall affirmed that Cornish Lithium remains committed to satisfying the majority of its funding requirements via the private sector.
In August 2023, the company announced it had secured a $67 million investment package, which includes $30 million from the UK Infrastructure Bank, $30 million from the US-based private equity fund Energy and Minerals Group, and an additional $7 million from investment company TechMet, supplementing its existing $24 million investment. The initial investment was part of a larger funding package which includes an additional $210 million in potential second-stage financing. The company expects that this total investment, combined with the project finance debt, will be sufficient to advance the project through to commercial production.
Wrathall said that the initial investment means that the company is well-funded through to the end of 2025 with the primary focus being the completion of the feasibility study.
"We are fortunate in that we have hugely supportive shareholders who have expressed a willingness to grow the geothermal brine side of the business," he said.
Turning to the challenging market fundamentals, where surging global lithium production and a slowdown in battery electric vehicle sales continue to weigh down prices, Wrathall told Commodity Insights that he hopes the market returns to a more balanced supply-demand dynamic.
"What's happening now is that, that deficit is coming forward because of projects that are not getting funded that should get. I mean, if you look at Europe, there's virtually nobody who's going to come into production on time," he said.
"I think the market is swinging back into balance. I'm hearing people starting to talk about going into deficit much quicker and prices swinging back up potentially quite quickly," Wrathall said.
He also expressed his hope that prices would not rise as high as $82,000-85,000/mt, as even if this happened briefly, it would cause valuations to "go through the roof" and attract too much interest in new projects, which would eventually lead to an oversupply.
"I think that we're coming back to a reality where the incentive price for lithium is well over $20,000/mt. If you look at the cost curve, future cost curves, that's telling you that, that incentive price is well over $20,000/mt," he said, adding that currently 60-70% of the cost curve is not making any money, including the large Greenbushes mine in Australia, which had scaled back production.
Wrathall pointed out that the lithium market is an "immature" market that has seen quick growth, but it has not seen a mega-scale lithium deposit emerge in the same way as nickel in Indonesia.
"Somehow, we've got to supply a market that's going from 1 million mt/year now to 3 million mt/year by 2030, which is only five years away," he said.
Platts, part of Commodity Insights, assessed lithium hydroxide CIF Europe at $10,000/mt Jan. 3, down 60% since the price assessment launch in October 2023.
