UK lithium industry urges government response to IRA
UK lithium industry participants last night urged the UK government to take action to strengthen the country's supply chains in response to the US Inflation Reduction Act and the EU's Critical Raw Materials Act (CRMA) and Net Zero Industries Act (NVIA).
In a parliamentary roundtable attended by Argus, senior figures from companies including Green Lithium, Tees Valley Lithium, AMTE Power, Rio Tinto, Traxys and Northern Lithium questioned Parliamentary under secretary of state at the Department for International Development, Lindsay Northover, on the UK's response to the acts. The roundtable was hosted by the UK Critical Minerals Association (CMA), which has been engaging politicians for many years about lithium and other materials. The UK risks losing control over its car industry and a one-time-only chance to capitalise on a temporary mining industry, industry figures said.
"The lithium mining industry is going to last for around 25 years. In 25 years, whatever is left in the ground will stay there," Tees Valley Lithium chief executive John Walker said. "We need to take advantage of it while it's around otherwise we risk depriving a generation of the jobs and wealth it can create."
US and EU get their acts together
The passing of the US IRA and the EU responses have alarmed UK industry figures, who said they are receiving difficult questions from investors and shareholders. One director of a UK lithium company said they were getting questioned "daily" over why they are not moving to the US.
A senior figure in attendance from a UK-based battery producer said several producers are looking at "ditching the UK altogether". UK battery producer AMTE Power has already hinted that it might leave the UK, and sees the US as a more attractive option.
"We don't have a competitive environment in the UK at this moment in time," AMTE chief executive Alan Hollis told a local radio station in Scotland two days ago. "The answer is perfectly clear where the most economic place for the gigafactory will be."
At the roundtable, UK lithium refinery director Richard Taylor of Green Lithium, criticised the most recent UK budget. "I was disappointed. There was nothing mentioned in the budget on critical minerals, which shows how high up the agenda we are. There will be a new world energy order equivalent to Opec and the UK won't be a part of it," he said.
Funding and regulation issues
Panellists pointed out two key issues which are not being addressed properly — funding and regulation. In terms of funding, many in the committee agreed the UK was spending too much on research and not enough on scaling up businesses.
The government's flagship allocation fund for electrification, the Automotive Transformation Fund (ATF), is flawed because of its re-imbursement model, meaning it expects businesses to spend money and then it will pay afterwards, Walker said. Others said they were exasperated by the UK government response when they asked for a revision of the ATF, with the Treasury's response being to offer a "review of the funding model" in 2025.
"We run the risk of making our own ambitions completely irrelevant. Electric vehicle adoption becomes unaffordable," said Stewart Dickson, director of Weardale Lithium, a project in the northeast of England.
Market figures also complained about regulatory issues, including permitting restrictions and registration, evaluation, authorisation and restriction of chemicals (Reach) regulations. A trader from Traxys asked why the UK had chosen to copy over Reach regulations from Europe costing "thousands of unnecessary pounds" following the UK's withdrawal from the EU, calling it a huge missed opportunity.
Others criticised the UK's planning rules, especially when it comes to permitting. The EU CRMA and NZIA have streamlined permitting, putting the EU at a competitive advantage to the UK.
"It took us four years just to get the basic permits we needed to do some boreholes and drilling — the new EU acts mean 24 months to full project permitting," one lithium mining executive in attendance said, "It's a step change and you can continue with your project under the assumption the permit has passed. We need to catch up."
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