British Lithium is moving rapidly towards the preparation of an integrated quarry and lithium refinery in Cornwall, with drilling ongoing and consultants hard at work building models. The ongoing work follows a successful preliminary economic assessment which was completed last year.
To date the company has enjoyed significant government support, both at a local and national level, and appears to be capable of making a valuable contribution to Britain’s plans to convert from a carbon-intensive economy into a carbon neutral one.
This aspiration is not just governmental virtue signalling to the environmental lobby. It’s actually a vital part of positioning the UK economy to meet the demands of the future because, as it stands, with a value of £82bn, the UK car industry is second only to the NHS in terms of generating employment.
What’s more, under the recently-signed Brexit deal with the European Union, it looks as though batteries for the next generation of vehicles produced on UK shores will themselves need to be built in the UK.
That raises the question: can it be done?
As a prerequisite to answering that question, Britain will need to be able to source economic supplies of the raw materials that are going to go into the new vehicles.
And that’s where British Lithium comes in.
The company is run by experienced mining executives with several successes behind them, and much know-how in the sector. What’s more, it’s supporters have deep pockets, and the will to see the project successfully through, both onto a stock market listing when the time is right, and ultimately into production as well.
Who are these people?
The chairman is Roderick Smith, a man who has successfully financed and built six mining industry projects in various jurisdictions around the world, and who played an instrumental role in the early days of the Cinovec lithium project in the Czech Republic, now one of Europe’s foremost lithium developments. This is a man who knows his way around mining, knows his way around lithium, and knows his way around finance.
He also knows how to put together a team.
There’s Dr Robert Gruar, a former innovation specialist at Dyson, a dedicated metallurgist, Dr Klaas Peter van der Wielen, as well as additional specialist geologists, a consultant from Wardell Armstrong, and academics from the local universities.
There’s also the chief executive, Andrew Smith, Roderick’s son, who was project manager at Cinovec. He also ran the feasibility study for the US$600mln Cominco phosphate project in the Republic of Congo, and specialises in complex metallurgy. In the case of the project in Cornwall, this is likely to come in particularly handy, since the lithium is contained in an unconventional source, a lithium mica, only found in parts of the UK and Europe.
Not that Andrew Smith has any doubts that the unusual metallurgy is likely to stand in the way of the company.
“We’ve got the skills, the team and the resources to get the project done,” he says.
As it stands, the estimated capital required to build the project is reckoned at £250mln. That’s a chunky amount of cash to be sure, but not unreasonable by mining industry standards, and surely easily within the range of a team like Smith’s.
“The plan is that we will fund the project internally up till the definitive feasibility study,” says Andrew.
“Then we’ll IPO, and fund construction with a mixture of debt and equity.”
It’s a tried and tested path that has been trodden by tens of thousands of mining projects worldwide, including some of the ones the Smith family themselves have worked on. Often, for companies such as these, it’s the initial seed stage that represents the real insurmountable hurdle.
But British Lithium is well past that. It’s already spent £4.5mln on the project, and is deadly serious about continuing.
“We’ve got the technical skills and we’ve got deep-pocketed investors,” emphasises Andrew Smith.
Given the economic backdrop around lithium and the UK’s car industry, further steps forward are a no-brainer. Indeed, it isn’t a question of whether British Lithium can go forward or not, but how far and how fast.
With government support the potential is immense.