UK backs £43 million plant pulling valuable battery metal out of hot water
Key Points
- GEL will invest £43 million in a Cornish lithium extraction plant.
- The government offered nearly £10 million through DRIVE35.
- Production of 1,500 tonnes a year starts in 2029.
- Output is enough for over 180,000 EV batteries a year.
- Tees Valley Lithium also received an £18.3 million offer.
The UK government has backed Geothermal Engineering’s £43 million plan to extract lithium from hot water beneath Cornwall.
The Department for Business, Innovation, Science and Trade said it had made Geothermal Engineering (GEL) an Offer in Principle worth nearly £10 million through its DRIVE35 Automotive Transformation Fund.
The new facility will pull lithium from geothermal brine deep underground rather than mining it from rock.
GEL plans to start commercial production in 2029, making around 1,500 tonnes of technical-grade lithium carbonate each year.
The government said this output is enough to power more than 180,000 typical electric car batteries. It added that the plant has the potential to scale to tens of thousands of tonnes a year.
The project will create nearly 50 direct jobs and support around 80 more across the supply chain.
“Lithium is fundamental to the technologies underpinning the automotive sector’s transition to zero-emission vehicles,” said Ryan Law, CEO of GEL.
“We believe the UK has an important opportunity to develop the resources, technology and expertise needed to establish a domestic lithium supply, giving the country greater control over an increasingly important raw material,” said Law.
Scaling up from United Downs
GEL already produces lithium at its United Downs geothermal site in Cornwall, where production began in February 2026.
That plant can currently make 100 tonnes of lithium carbonate a year. The new facility would produce 15 times that amount.
Energy Live News reported earlier this month that lithium from United Downs had reached technical-grade specification. GEL described this as a step towards scaling up UK production.
GEL has set a target of more than 18,000 tonnes a year over the next decade, according to ThinkGeoEnergy. That volume would supply about 250,000 electric car batteries annually.
The government expects demand for lithium to rise by 1,100% by 2035, driven largely by electric vehicle batteries.
“Extracting lithium in the UK is vital for several reasons: it diminishes dependence on supply chains dominated by China and supports the production of electric vehicle batteries, essential for the UK’s transition to renewable energy use in zero emission vehicles,” said Julian Hetherington, Automotive Transformation and Engagement Director at APC and Zenzic.
Teesside refinery also backed
The government’s announcement also covered Tees Valley Lithium’s £18.3 million DRIVE35 offer. The grant goes towards a £185 million refinery in Teesside.
Parent company Alkemy Capital Investments first announced that award on 17 September. The refinery’s first phase will produce 25,000 tonnes of battery-grade lithium hydroxide a year, according to Proactive Investors.
“Cornwall has a proud mining heritage, and companies like Geothermal Engineering are helping to write its next chapter in unlocking the South West’s industrial potential,” said Jonathan Reynolds, Business Secretary.
Both offers remain subject to due diligence and final approvals.
DRIVE35 is the government’s flagship automotive programme. It provides £4 billion in capital and R&D grant funding up to 2035.
