Government offers funding to lithium projects in Teesside and Cornwall

The government has offered funding to two lithium projects, a refinery in Teesside and a new mine in Cornwall, which together are expected to unlock nearly £230 million of private investment. Lithium is a critical mineral used to power electric vehicle batteries, and demand is expected to rise by 1,100% by 2035.

In Teesside, Tees Valley Lithium is investing £185 million to set up what is described as one of Europe's largest lithium refineries. It has received a government Offer in Principle of £18.3 million through the DRIVE35 Automotive Transformation Fund. The government said the refinery will support hundreds of jobs and strengthen the UK's battery supply chain.

In Cornwall, Geothermal Engineering Limited (GEL) will invest around £43 million in a lithium extraction facility after receiving an Offer in Principle worth nearly £10 million from the same fund. The project is expected to create nearly 50 direct jobs and support around 80 more across the supply chain. Commercial production is set to begin in 2029, with the site expected to produce around 1,500 tonnes of lithium carbonate a year from underground geothermal brine, which the government says is enough for more than 180,000 typical electric car batteries.

Both offers remain subject to due diligence and final approvals. DRIVE35 has also recently supported research and development projects led by companies including Weardale Lithium and Northern Lithium, aimed at developing new extraction technologies and scaling up domestic production.

Business Secretary Jonathan Reynolds said: "Hot on the heels of over £1 billion of automotive investment secured already this month, this latest win is a big step towards building our industrial resilience."