Mining in Focus: Increasing demand for critical minerals

Charles Bond  0:17  
Hello, and welcome to another brief video from Gowling WLG exploring the clean energy transition and the investment into critical minerals. This is one of a series of videos we're doing in advance of PDAC 2022. My name is Charles Bond and I had Gowling WLG's mining practice here in the UK. Today I'm joined by Jeremy raffle, the founder and Chief Executive Officer of Cornish Lithium, a UK-based innovative mineral exploration and development company, providing the raw materials for the green Industrial Revolution. Jeremy has more than 30 years of experience in the mining industry, graduating from Camborne School of Mines not far from Cornish Lithium's current projects, and having a successful career in London in mining investment banking, including being a Global Dead of Natural Resources at Investec Bank.

Jeremy founded Cornish lithium in 2016. And it's been somewhat of a passion for him ever since. Thank you for joining us today, Jeremy. And agreeing to talk about the lithium industry and Cornish Lithium as part in its let's start with the critical minerals question. Just this morning, the Financial Times headline reads that electric vehicle targets are impossible, without changes to the lithium pipeline, and that battery manufacturers are confronting a severe lithium shortage with China owning 70 to 80%25 of the supply chain for lithium ion batteries. What strategies are you seeing governments using to overcome that Chinese dominance? And particularly the strategies in the UK? And how does Cornish Lithium, form a part of that? 

Jeremy Wrathall  1:56  
Okay, so thanks, Charles. It's great to be on this on this. This webcams what costs today. So really, I think, I think first of all, I think governments have been taken by surprise. And I think that's the big backdrop to all of this, that the Chinese have been thinking about the electric vehicle revolution for at least two decades, they missed out on the internal combustion engine revolution. And they were determined not to miss out on the electric vehicle revolution, and have really thought about that as a strategic state for a long time. And therefore, you're seeing Chinese companies enmeshed in lots and lots of the supply chain. And really, the long and short of it is that they've locked up about 80%25 of the battery, raw materials and some chemical supply chain. So that's a very, very difficult backdrop for Western economies to compete against. But what you're now seeing is a sense of urgency from particularly the US with President Biden in invoking war powers to try and get this industry going a domestic industry so that they are not dependent on China. And you've seen that last week. And we're ready, he's wrapping up his effort to try and get domestic production going as soon as possible, right from lithium, rare earths nickel, anything that they can possibly get, because they realized that they cannot be dependent on China. You've also seen that from the EU, who published a critical raw materials list last year.

And also, obviously the US did as well. From the UK side, we are unfortunately, way behind. I'm on the Critical Raw Materials Committee of the British government. And you know, really, that is an evidence of the government trying to step up as soon as possible, and produce at least a raw materials list which is yet to materialize, but will be published later this year, of highlighting, which methods are we dependent, you know, which methods are critical to this complete industrial revolution that we're seeing right now? We're moving away from fossil fuels to renewable energy and battery storage, watch which metals are vital for that. And which metals has the UK got any sort of advantage in? And so that really plays into what we're doing at Cornish Lithium, which is, let's start from ground zero, that does the UK have any geology which is suitable for the extraction of battery metals? And the answer is absolutely yes. There was a report put out in 1987 by the British Geological Survey that highlighted the huge potential that remains in the in Cornwall and you know that we are busy unwrapping that opportunity.

Charles Bond

Thanks, Jeremy. So in the UK, it's interesting. We had a new act that came in last year the National Security Investment Act to protect what the UK sees as critical assets in the UK, from your experience is the government looking at lithium falling within that act? 

I think they are, I think the government sort of woke up about a year ago and realized that not only have we got the right geology, but we need to secure it and develop it as fast as we can. It's not just the fact that we have the raw materials, it's also the profound implications of if we don't develop them, what happens in the UK. So point number one is that the automotive industry is the second biggest, most important export industry for the whole of the country. If that if we don't support that, with batteries, etc, then we could lose our automotive industry completely. And that's a really horrific thought, because that indirectly indirectly supports about 100,000 people in the UK.

But also, if we handed the opportunity to create economic value add to China or elsewhere, if we if we, if we internalize and build a domestic lithium, a raw materials industry and a battery raw materials industry, we capture those jobs here in the UK. So it's not only just the raw materials, it's the cathode manufacturer, that's the biggest hole in the in the chain at the moment. We don't have any cathode materials manufacturing here. We have aspiring battery companies like British Volt, particularly, and others and also the nascent electric vehicle manufacturers like Jaguar Land Rover, etc. But really, that supply chain is coming together. And the government is really trying quite urgently working on that right from the Prime Minister down.

It would be a big problem if they did. But I think the government is thinking about all those type of how do we do it? How do we, how do we mobilize British industry, British innovation? And really, I keep on saying to people, this is the Manhattan Project, this is a nationally important, hugely important industry, because if we don't do it, the implications for the economy are, are pretty dire.

Charles Bond  7:34  
Let's let's kind of come down from the wider scene and maybe narrow down just a little bit here about what Cornish Lithium is up to at the moment. I know you have different types of projects, you've got Hardrock, and you are looking at different ways of extracting lithium from groundwater. Do you want to just maybe just give us a little bit of overview of the current state of your projects? 

Jeremy Wrathall  7:59  
Yeah, absolutely. I mean, I was I was on site yesterday. And I'm extremely proud of what we built in Cornwall that the first thing is the lithium extraction pilot plant that extracts lithium, using direct lithium extraction from water. So we drilled into those ground waters, we've we've shut them up through the drill hole, like that straw, like very much like an oil and gas project in many ways, and bringing up to surface putting it through this extremely high tech pilot plant, which is cost over 4 million pounds to build. But I'm delighted to say that that is commissioned, we start live testing very shortly in the next couple of days. And we're very excited to actually live produce lithium chloride, which is the precursor for lithium carbonate or hydroxide. So really, that was a British built British engineered project with French technology called GLS. We also evaluating the other direct lithium extraction technologies at that site.

And, you know, we are then going to move forward to a commercial extraction plant, hopefully in the next couple of years. And we really do believe we've got the foundation for that we have a huge amount of mineral rights agreements across the country, which makes it possible and we also have all the geology and technical information we need to make that happen. And also that has the other added advantage of producing a large amount of heat, which is in the face of the current gas crisis. A very important for decarbonizing industry in Cornwall, so it has you know, it has produces lithium but also produces a lot of heat and zero carbon heat. So, that's really interesting. 

Then the other side is our hardrock project, which is on the side of a decommissioned China clay pit, very shallow pit. The rock beneath that is very enriched in lithium. It's not sponsored mean it's mica project, but we also have just taken possession of the processing site which is very nearby. That will be at the site of a demonstration plant was going to be built over the next few months. And really to further evaluate the commercial opportunity, we've got a licensed technology to extract that lithium from that particular type of rock that's called, developed by a company called Lipitico, we have an exclusive license so that we really are motoring ahead with our projects. And we that project will be in production by 2026. So right at the right time for British industry to need that product.

Charles Bond  10:33  
The geothermal stuff is really interesting, will that allow you to say that you are kind of a net-zero business by the by the time you're into production? 

Jeremy Wrathall  10:44  
I think it will do yeah, we'll do particularly because, as you probably aware that the energy industrial strategy came out like late last week, that highlights the potential for floating offshore wind off in the Celtic Sea, which is right next to Cornwall, and we will hopefully get floating offshore wind energy delivered almost directly to our site, the big transmission station is only about a mile away from our project. And that will truly mean it zero carbon.

Charles Bond  11:18  
And I think if you if you speak to people, or we spoke to people 10 or 15 years ago, they would have been a bit surprised about Cornwall, although perhaps they shouldn't be given the kind of rich mining history that Cornwall has had. Is Cornwall now becoming a major centre for mining. Maybe globally is the wrong word. But internationally. 

Jeremy Wrathall  11:41  
I'm looking at it's certainly got the potential for that you've got some ...Davis, through his vision blue fund investing in the former historic China, former tin mine South Crofty, and that's going to be dewatered. So you've already got one of the possibly top 10 mining people around the world involved in that project.

We've also just attracted Ian Cockrell, the former CEO of goldfields to a board that was announced yesterday. So you've really got some real heavy hitting people involved in it. You've got a lot of government support from the National Government, right down to the Cornwall Council are very supportive of this new industry and the very development of an old industry, as you mentioned earlier, but yeah, there's a huge amount happening. And I think Cornwall is recovering. Its Mojo lost, really, over the last few years. But still, you know, it is important that there's still a very major china clay mining industry in Cornwall, which people forget about, it's still exporting 6000 tons of product every year. And still a lot of infrastructure, which is extremely helpful for what we're trying to do.

Charles Bond  12:50  
And you mentioned government support, you obviously have some grant funding, but you've also managed to raise while other private financing, especially from the Cornish community as well. 

Jeremy Wrathall  13:01  
We have, excuse me, we initially started off with angel funding, then we went to something very novel and we went because we had so much interest from the local community and investing, we went with crowdfunding, which was very, very effective in raising a large amount of money. But recently, we attracted money from checkmate, which is one of the biggest, dedicated technology, metals and battery metals funds globally, headed up by Brian metal, another industry veteran of the mining industry. So that money is up to 18 million pounds, we've drawn down the first 9 million. And we're the second to come and very shortly once we finished our scoping study on our hydro project, which is just being finished right now. So we really have got that hard hitting deep pocketed money invested in us already. We've got a huge amount of interest from investors, many investors have been to site recently and seen the potential. And really, we are planning on an IPO later this year. Lots going on. 

Charles Bond  14:09  
And our future's looking very promising both the call and for Cornish Lithium. 

Jeremy Wrathall  14:13  
Oh, absolutely. We're excited. We're excited. We're really pleased that you know this could be a transformational industry for the for the UK economy as well. Very exciting. 

Charles Bond  14:24  
Well, thank you, Jeremy. Really appreciate that and for taking time out to talk to us today. Thanks, Charles. Great to be here. Thanks very much.

It's been interesting to see how different countries have reacted to this issue. You know, the, for example, in Mexico, I know they're talking about nationalizing the lithium industry, I don't think, Well, I hope the UK Government isn't going to go that far.