Cornish Lithium races to avoid collapse with £10m fundraising drive


Oliver Gill
Mon, 26 June 2023

Cornish

The company at the centre of the “Klondike of lithium” in Cornwall has just weeks to find £10m of new funding to avoid collapse.

Cornish Lithium needs to secure a capital injection by the end of July “to ensure the business can meet its financial commitments”, the company said in its annual report.

The business has been linked with playing a central role in reviving the fortunes of UK car building with hopes that it can produce enough lithium to help fuel plants manufacturing electric vehicles.

Then-prime minister Boris Johnson hailed Cornwall in 2021 as the “Klondike of lithium” and raised the possibility of a gigafactory being built in the county.

However, Cornish Lithium needs more money ahead if it is to start production in 2026.

The company received £18m from investment metals investor TechMet in 2021. A US government-backed investment company has also injected capital.

But just weeks before an end-of-July deadline, Cornish Lithium’s accounts – signed on June 5 and filed last week – revealed the parlous state of its cash reserves.

The company said: “At the time of signing this report, the extent and timing of this funding were uncertain, however discussions are progressing well and management are confident that an agreement will be reached in good time to allow the group to meet its short-term commitments.”

Bosses continued that Cornish Lithium is also in advanced negotiations with new investors to facilitate “medium to long term funding for the group’s projects”.

Even if the £10m in short-term funding is agreed, if the company cannot secure medium to long term investment from new investors, “the group would be required to implement mitigations to reduce planned spending”.

In Cornish Lithium’s annual report, Ian Cockerill, the chairman, blamed the Government for failing to offer taxpayer-funded incentives to match those offered to companies in the US and the European Union.

He said: “The UK is currently being left behind in this global race to secure the industries that will drive the energy transition to renewable power and the electrification of transport.

“The automotive sector and related industries are a key component of the UK’s GDP and the damage that a diminished or, worse still, a disappearing UK motor sector will cause the UK economy is potentially enormous.

“The lack of an industrial strategy has left the UK at a significant disadvantage in the race to build electric vehicles.”