Europe’s largest electric car battery refinery given go-ahead in boost to UK industry

Lithium Factory
Lithium Factory

Plans to build the biggest lithium hydroxide refinery in Europe in Teesside have been given the go-ahead, paving the way for the creation of 1,000 jobs and a local supply of a key battery material.

Redcar and Cleveland Borough Council approved the plan for the plant, which is expected to produce the metal in refined form from 2025. The next step will be to raise $300m (£248m) to build the plant in the new year.

The news comes as doubts have been cast over the future of the nearby planned Britishvolt battery plant at Blyth, which struck a deal with investors last month to stave off collapse until it can sign concrete deals with buyers.

The new lithium refinery will be able to supply four gigafactories and the company behind the project, Alkemy, is confident it can find plenty of buyers for the lithium it will produce, said chief executive John Walker.

Mr Walker said: “Consumers are adopting electric vehicles much faster than was predicted even 12 months ago. We feel demand is assured.

“The great thing about the location at Teesside is that within 24 hours we can be in the heartland of the German automotive industry as well.”

The plant will receive material that is already quite high in lithium content after an initial refining process is carried out near to the mines in Australia which will supply it.

The refinery will then use green electricity from vast North Sea offshore wind farms to separate the material into lithium hydroxide and sulphuric acid as a byproduct, which can be sold to chemical firms locally.

Demand for lithium which is locally produced is likely to rise sharply, Mr Walker said. He added that car makers and other industries trying to decarbonise are likely to want to find sources other than China, which currently dominates the market.

Currently, it is estimated that more than 90pc of rare earth minerals are processed in China, even though the unrefined materials can be found in countries including Australia, the US, Chile and Argentina. Refined lithium is then used to make batteries for electric cars and a plethora of gadgets.

Mr Walker said: “There'll be a strong demand in the EU for this material. The logistics costs are immaterial to the selling price of the product itself. So we see no commercial barriers to selling to the EU.”

Shares in Alkemy Capital Investments rose 24pc in London following the news.

It comes after 300 staff at Britishvolt agreed earlier this month to a pay cut as the company races to secure its long-term future.

Parts shortages and other fallout from the coronavirus shutdowns have halved the UK’s car output. If it returns to pre-pandemic levels, producing batteries for these cars will require about five gigafactories, according to the Faraday Institute, including Britishvolt and Nissan’s planned factory in Sunderland.