£18.3 million Government investment could provide half of the UK’s domestic lithium capacity ambition
17 September 2026
An offer in principle has been made to Alkemy Capital Investments plc (Alkemy), the 100% owner of Tees Valley Lithium Ltd (TVL), for government capital grant funding, of up to £18.3 million.
The grant will go towards ‘Phase 1’ of TVL’s merchant lithium refinery at the Billingham Chemical Complex, in Teesside.
The offer comes via the Automotive Transformation Fund, which is part of the UK Government’s DRIVE35 programme, delivered by the Department for Business, Innovation, Science and Trade (BIST), in partnership with the Advanced Propulsion Centre UK (APC) and Innovate UK.
Julian Hetherington, Automotive Transformation & Engagement Director, APC and Zenzic, said:
“The UK Critical Minerals Strategy’s 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.
This commitment by the Department for Business, Innovation, Science & Trade through the DRIVE35 programme represents a significant step forward in delivering critical materials supply resilience for the UK, and for the wider region’s transition to clean transport and energy solutions. The UK’s Battery Strategy identified mid-stream processing of battery materials as a competitive and strategic opportunity for the UK; balancing UK extraction and large-scale ‘merchant’ refinery projects such as TVL’s provides sound, and cost-effective foundations for the rapidly growing battery industry.
The opportunity in the UK is predicted to grow significantly. The APC’s latest demand report, to be released next week, predicts that the UK’s lithium carbonate equivalent (LCE) demand for automotive applications will skyrocket from 9kt in 2027 to more than 50kt by 2035.”
Blair McDougall, Minister for Reindustrialisation, commented:
“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 UK.
“Teesside has a proud industrial heritage, and companies like Tees Valley Lithium are helping to write its next chapter. This government’s £4 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.”
*This offer remains subject to final HMG approvals, and TVL is working with BIST to complete the remaining due diligence and conditions required to access the funding.
Read APC Automotive industry demand forecasts here.