The U.K. lithium industry is seeking fast and decisive government action to help establish a full supply chain from mine to electric vehicle and futureproof the country’s car industry.
Speaking at meeting on Monday, industry leaders and member of the House of Lords, Lindsay Northover, called for funding and changes to permitting to develop the country’s battery industry as it grapples with challenges from regions offering greater incentives such as the European Union and United States.
“The U.K. has enough lithium in the ground to be self-sustaining and we can create a great export business from what we have in the U.K. but we need to get into production as soon as possible,” said John Walker, CEO of Tees Valley Lithium, a prospective lithium refiner based in the country’s north east.
Lithium is key in helping the U.K. decarbonize as it’s a key component in electric-vehicle batteries but lithium refineries, mines and gigafactories will all be needed to help transform the supply chain, Mr. Walker said.
No U.K. mining or refining currently takes place, but at least three mining projects are in preliminary stages in England and the British Geological Survey indicated this week that more resources may also be available in Scotland.
“If we don’t successfully transform our car industry, we’ll transform our biggest export industry to our biggest import industry,” Mr. Walker said.
Mr. Walker was echoed by Richard Taylor, co-founder of Trafigura Group-backed Green Lithium, a fellow lithium refiner who said that a lack of capital is holding development back in the U.K., noting that when establishing a refiner or other part of the supply chain, U.S. subsidies make it a more attractive location.
The U.S. Inflation Reduction Act has made roughly $369 billion in green-tech subsidies available to firms looking to locate in the U.S. or friendly countries while the EU is aiming to match U.S. subsidies through a state aid program. Both the EU and the U.S. are offering provisions to help secure raw materials and ensure major industries remain within their jurisdictions.
The U.K. car industry employs 797,300 people according to the Society of Motor Manufacturers and Traders–representing more than 800 automotive-sector related companies in the U.K.–however fears of the industry dwindling have been rising, especially after the U.K. voted to leave the EU in 2016. Manufacturers, such as the U.K.’s production arm of Honda Motor Co. Ltd and Bayerische Motoren Werke AG, have mooted closures and moves overseas. BMW has already said it will halt the manufacture of electric Minis in its Oxford plant and move production to China.
Those at the All-Party Parliamentary Group meeting, a forum for politicians to discuss policy issues with stakeholders, warned that the U.S. Inflation Reduction Act and the EU’s Critical Raw Materials Act hurt Britain.
“The U.K. government is negotiating a free trade agreement with Australia and is under the illusion it can rely on Australia for lithium, ” said Roderick Smith, chairman of British Lithium, a mining project in Cornwall.
Other destinations would be more attractive for sellers of raw materials than the U.K., because of trade agreements, Mr. Smith said.
“Other people have got there first – Chinese companies own half of the projects [in Australia] and the other company is Albemarle, which is American. The IRA is about onshoring and Britain doesn’t have a free trade agreement with Australia but the U.S. does, so it will get what lithium it can from Australia that China isn’t,” Mr. Smith added.
Retail incentives are also lagging in the U.K. “The solution in China is very cheap credit,” said Martim Facada, lithium trader at Traxys. “Incentives to buy EVs, fines for internal combustion engines – Europe is lagging behind China. Whether we want to change this quickly is up to us.”
Write to Yusuf Khan at email@example.com
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