Europe’s first large-scale lithium refinery one step closer with new partnership

12 May 2022

ev battery

UK-based lithium processing company Green Lithium has agreed terms with commodities trading company Trafigura. The pair will establish a supply of materials for refining and investment in the development of a new processing plant.

Under the newly-established relationship, Trafigura will supply lithium feedstock to the planned refinery and invest equity in Green Lithium’s development phase funding round.

Green Lithium is developing one of the first commercial lithium refineries in Europe. Located in the UK, it will supply European electric vehicle (EV) and battery manufacturers with lithium chemicals. The company hopes its facility will boost the country’s green infrastructure, enable UK-based cathode, battery-cell and EV manufacturing, as well as giving the the jobs market a boost.

The importance of supply chain

As carmakers across Europe look to produce more electric vehicles, shorter supply chains are a crucial factor in making these plans work. Currently, the industry relies heavily on Asia for EV batteries, while supplies of raw materials can come from many different regions.

Additionally, there is no commercial lithium refining capability in Europe, leaving the continent’s rapidly growing EV-battery market wholly reliant on China for critical metals. With gigafactories being built across Europe for EV-battery manufacturing, destined to help shorten the supply chain, a reliance on lithium and other raw materials from outside the continent still creates a lengthy network. This is not only susceptible to disruption, but will also be less eco-friendly due to various transportation methods.

Therefore, locally-sourced lithium will help to reduce lead times for battery production, while keeping carbon emissions and costs down. In delivering its refinery, Green Lithium expects to create the missing link and guarantee upstream supply-chain security.

The business states that by 2030, the UK and European EV industries will require an annual supply 600,000 tonnes of refined lithium chemicals to meet announced targets. This means a supply growth of more than 400% is required over the next eight years. That demand will not be met by the refining capacity that is available or planned at present, meaning Green Lithium’s facility is crucial to enabling an expanded EV market in Europe.

‘The electric revolution is fundamental to reducing the carbon emissions that contribute to global climate change and ensuring net-zero targets can be met,’ commented Sean Sargent, CEO at Green Lithium. ‘Our refinery will accelerate the adoption of electric vehicles and sustainable energy storage through the increased supply of low-carbon, battery-grade lithium chemicals, a key component of lithium-ion batteries.

‘Fulfilling this vision requires the right supply chain and investment partners. In Trafigura, we have found the perfect match in a company that not only has vast experience and expertise in the battery supply chain, but that is also willing to make a key equity investment to support Green Lithium in achieving its project objectives,’ Sargent added.

Diversifying EV-battery material supply

According to Trafigura, increasing and diversifying the supply of raw EV-battery materials will be vital for the commercial viability of the European battery supply chain, the electric vehicle revolution, and the transition to net zero.

Trafigura is an established participant in the international nickel and cobalt-trading markets, both of which are also critical for EV battery manufacturing. The company is investing significant resources to diversify and develop its business across other battery metal commodities, strengthening its position in the global battery and electric-vehicle value chain.

‘In addition to our core business in physical commodities trading and logistics, Trafigura has a strong track record of financing and investing in mining and metals projects globally, stated Socrates Economou, head of Nickel and Cobalt trading for Trafigura. ‘This landmark project has the potential to revolutionise the European supply chain for EV production and sustainable energy storage at this critical time in the energy transition.’