UK gigafactories to drive domestic demand for local metals and minerals

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The ‘rules of origin’ requirements for electric vehicles that were set out in the UK’s Brexit deal means that by 2027, 55% of an electric car’s value must be built in the UK or European Union in order for the vehicle to remain exempt from import and export tariffs.


The UK’s car manufacturing industry is worth GBP82bn and is the second biggest industry by employment, accounting for around 800,000 direct and indirect jobs. As a result, the planned gigafactory sites in Northumberland, Sunderland and Coventry are fundamental to securing the future auto manufacturing in the UK and the UK’s economy.


Northumberland gigafactory


The most advanced electric car battery plant is Britishvolt’s GBP2.6bn facility in Northumberland. The plant has already received planning permission and, subject to funding, construction is expected to commence this year, with the plant becoming operational by mid-2023 and reaching full capacity by 2027. Once at full capacity, the Northumberland gigafactory is expected to produce around 300,000 lithium-ion batteries a year. Estimates say that this plant will create around 3,000 direct jobs and 5,000 in its wider supply chain.


Sunderland gigafactory


Nissan and Chinese battery manufacturer, Envision AESC, have also announced plans to build a GBP1bn production and recycling facility in Sunderland. This plant is expected to commence initial operations in 2024 and will initially have an annual capacity 9GWh, sufficient to produce batteries for up to 100,000 vehicles a year. This plant is anticipated to create around 1,650 direct jobs with 4,550 in the wider supply chain.


Coventry gigafactory


Proposals from a partnership including InoBat Auto for a battery manufacture centre at Coventry Airport were first put forward in February and since then this development has gathered pace with a public consultation already completed and a pre-emptive planning application submitted last week.


The Coventry gigafactory is expected to create over 6,000 direct jobs and will add GBP434mln in gross value to the regional economy each year, as well as attracting investment of around GBP2bn. Both Coventry Council and Warwick District Council will vote on the proposals later this year and if the plans are approved then production could commence by 2025.


This factory will be powered by 100% green energy, using a combination of solar and wind power, as well as grid-supplied renewables. The plant will also be able to recycle used batteries, as well as building new ones.


Battery manufacturers’ green credentials demand locally sourced raw materials. But can raw materials be locally sourced?


The dominant metals and minerals used in electric vehicle batteries are lithium, aluminium, cobalt, graphite, manganese, and nickel. Given the prospective gigafactories’ green credentials, the owners will undoubtedly want to source as much of the raw materials for their electric vehicle battery production from within the UK as possible, in order to keep the carbon footprint of their batteries low. But is this possible given the UK’s dwindling mining industry?


While the UK contains historic mines that have produced cobalt, nickel, graphite and manganese these operations were of a scale that means they are unlikely to make economic sense, should any residual mineralisation remain in these areas. So, it’s unlikely that many of these raw materials can be domestically produced in the UK.


In terms of aluminium, the UK has one aluminium smelter, which produces around 43 000 tonnes per year, located in the Scottish Highlands. While this smelter processes ore extracted from other countries, it uses power generated by its own hydroelectric power station, which could make its product attractive to battery manufactures. This may perhaps help secure the future of the operation, which has been looking for a potential purchaser following the collapse of Sanjeev Gupta’s metal empire and Greensill Capital.


There is also one nickel smelter in the UK, located in Clydach, Wales, which is owned by mining giant Vale SA (NYSE:VALE). It produces around 40,000 metric tonnes of nickel per year using globally sourced ore. Vale is seeking to improve the green credentials of its UK product by looking into the potential of installing an Advanced Energy Plant, which will produce energy for use within the existing processes, reducing Vale’s on-site carbon footprint by 25% and at the same time improving the global competitiveness of the operation.


Lithium – domestic options available


In terms of sourcing raw materials domestically for electric battery manufacturing, there aren’t many options available for battery manufactures, but one metal where there could be potential is lithium.


There are at least two companies currently developing lithium projects within the UK, Cornish Lithium and British Lithium Limited, both of which are currently private.


Cornish Lithium


Cornish Lithium is exploring and developing both geothermal lithium brines projects and hard rock lithium projects within Cornwall.


At the company’s United Downs Geothermal Power Project – a collaboration with Geothermal Engineering Ltd – the partners are planning to extract lithium from the geothermal waters, which circulate naturally at depth in the granite rock below Cornwall. The company will also use the heat from the geothermal brines to power the processing of the lithium, creating a low-carbon footprint lithium product.


In June, the partners completed the construction of the geothermal water test site at the project and have appointed GeoLith SAS to provide their Li-Capt direct lithium extraction (DLE) technology for use in the pilot plant.


The GBP4mln pilot plant is being supported by the Cornwall and Isles of Scilly Local Enterprise Partnership with GBP2.9mln from the UK government’s Getting Building Fund. Cornish Lithium plans to commission the pilot plant in March next year. Once built, the pilot plant is expected to have a nominal capacity of 10 tonnes of lithium carbonate equivalent per year and the results of the pilot study are expected to provide sufficient information to enable the design of a commercial lithium plant in Cornwall.


Cornish Lithium is also evaluating the potential for extracting lithium from a recently operational China clay pit at Trelavour Downs in St Austell. Mid-year, the company completed its second drill programme at the project and said expects to publish a maiden mineral resource estimate for the project in the autumn of this year, with a scoping study in the works for the first quarter of next year.


The company has also formed a consortium involving Imerys Minerals Limited and HSSMI, a sustainable manufacturing innovation consultancy, to assess the potential for co-production of lithium from waste material produced from both current and historic China clay operations in Cornwall (CLiCCC Project). The GBP1mln project is being funded by a grant from Innovate UK, a non-departmental public body focused on driving productivity and economic growth by supporting businesses to develop and realise the potential of new ideas.


British Lithium


British Lithium Limited is developing the Greenbarrow Lithium Project, in Roche, Cornwall. The company has developed a bespoke processing technology to process lithium mica and is preparing to commence construction of a pilot plant to test production methods and demonstrate the potential quality of the product to potential customers. The pilot plant is being funded by a GBP2.9mln Innovate UK grant and high net worth investors.


The company has developed four key technologies, which it patenting, including the electrostatic separation of the lithium mica from the rock without the use of chemicals; and an innovative hydro-metallurgical process that uses salt, rather than acid, to extract the lithium from the mica.


British Lithium has already completed two drill programmes at the project, defined a JORC 2021 compliant mineral resource estimate which indicates that it has made a significant discovery of hard rock lithium mineralisation within the St Austell granite.


British Lithium is aiming to be in full-scale lithium production within three to five years and expects to employ 350 staff directly, with numerous indirect jobs also created.


Technology Minerals Ltd: Sourcing local recycled material


Technology Minerals Ltd is a battery metal play with a very big green twist. While it has mining assets focused on nickel, copper, cobalt and lithium, the near-term story will be written by its Recyclus battery recycling operation. It has developed a technology that allows it to recycle both lead-acid and lithium-ion power units.


The opportunity is a potentially huge one with batteries posing a major waste headache and lithium-ion manufacturers for the first time scrambling to use reconstituted material with basic battery metals in short supply.


Recyclus plans to grow from an initial 10,000 tonnes of lead-acid capacity to 60,000 tonnes in five years and to 20,000 tonnes from 5,000 in the lithium-ion space in the same time scale. Having recently completed a pre-IPO funding round, the company is looking to use the money to open two new sites – on Teesside and in Coventry.


It is aiming to become a listed company at some point in the current quarter.


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