U.K. Backs First Lithium Processing Refinery

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

The U.K. government continues its push for domestic sources of critical minerals with a loan to support the construction of the country's first lithium processing plant in Teesside.

Funding Agreed

Government funding to get the U.K.'s first lithium hydroxide refinery in Teesside off the ground has been agreed with developer Alkemy Capital. 

The company behind the Tees Valley Lithium (TVL) project said that the initial grant of £18.3 million (US$24 million) will be used for Phase 1 of the refinery. With an estimated startup date of 2028, it would be the country's first lithium refinery and be capable of producing 25,000 tonnes per annum (TPA) of battery grade lithium hydroxide monohydrate (LHM) - enough for use in the batteries of 550,000 electric vehicles (EVs). The goal is to scale production to 100,000+ tonnes per annum, which Alkemy claimed would make it one of Europe's largest lithium refineries at full capacity. According to Industrial Info Resources data, there are four active projects at Billingham worth more than US$1.5 billion. 

The proposed refinery at Billingham Chemical Complex will be worth "billions of pounds" to the economy over its 25-year lifespan, the company stated, including £1 billion (US$1.3 billion) of direct benefit remaining within the heavily industrialized Tees Valley and North East region. In June, the company claimed that the project will bring £2.1 billion (US$2.8 billion) to the U.K. economy, create 1,700 jobs during its construction and reduce the U.K. and Europe's battery supply chain's dependence on China. For additional information, see June 30, 2026, article - U.K.'s First Lithium Refinery Will Add $2.8 Billion To Economy.

Filling a Gap

According to Alkemy, Europe's battery supply chain has attracted substantial investment in cell manufacturing while the midstream refining step, where lithium intermediates are converted into battery-grade chemicals, "remains largely absent from the continent." It added: "TVL's merchant refinery at Billingham addresses this gap directly, converting lithium from a diversified domestic and international supply base into battery-grade lithium hydroxide for the U.K. and European market, on a site with over a century of process-industry heritage, deep chemical-processing skills and access to Teesport."

The Government Take

U.K. Minister for Reindustrialisation Blair McDougall said: "This is a really encouraging milestone for Tees Valley Lithium and shows what's possible when British innovation and expertise are put to work. It shows we can refine and use critical minerals here in Britain to support zero emission vehicle manufacturing in the U.K.. "Teesside has a proud industrial heritage, and companies like Tees Valley Lithium are helping to write its next chapter. This government's £4 billion (US$5.3 billion) DRIVE35 programme is backing businesses like this to grow, invest and help build the supply chains we need for the years ahead as part of our Industrial Strategy."  

Positive Reaction

Julian Hetherington, Automotive Transformation & Engagement Director at the U.K.'s Advanced Propulsion Center, commented: "The U.K. Critical Minerals Strategy includes an objective to build domestic supply chain resilience and security, by growing the UK's competitive advantage in midstream refining. Phase 1 of the Tees Valley refinery project could represent nearly half of the 2035 domestic lithium capacity ambition, detailed in the Strategy. A significant investment for a significant outcome -- exactly what the Automotive Transformation Fund was set up to unlock."

Key Takeaways 

• The U.K. government provides funding commitment for the country's first lithium processing plant in Teesside.
• Tees Valley Lithium (TVL) will be capable of producing 25,000 tonnes per annum (TPA) of battery grade lithium hydroxide monohydrate (LHM) from 2028, enough for use in the batteries of 550,000 electric vehicles (EVs).
• Industrial Info Resources is tracking four active projects at Billingham worth more than US$1.5 billion.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).