The company central to Cornwall’s “lithium gold rush” has just a few weeks left to secure £10m in additional funding to prevent bankruptcy.
Cornish Lithium is urgently seeking capital investment before the end of July to ensure it can meet its financial obligations, as disclosed in its annual report.
There are high expectations for the company to rejuvenate the UK’s auto manufacturing sector by producing enough lithium to power plants producing electric vehicles.
In 2021, then-Prime Minister Boris Johnson dubbed Cornwall the “lithium gold rush” and hinted at the potential for a gigafactory in the region. However, to initiate production by 2026, Cornish Lithium requires further investment.
In 2021, the company obtained £18m from metals investment firm TechMet, and a US government-backed investment company also contributed funds. But as the end-of-July deadline looms, the company’s accounts—signed on June 5 and filed the following week—exposed the precarious state of its cash reserves.
In their report, the company noted that the scale and timing of the needed funding were still uncertain, but discussions were progressing well. Management is confident that an agreement will be struck in time to cover the company’s short-term obligations.
Company leaders also stated that advanced negotiations with new investors are underway to secure “medium to long-term funding for the group’s projects.”
However, if the company fails to secure this level of investment, it will have to implement cost-cutting measures, even if it successfully agrees on the £10m short-term funding.
In the annual report, Ian Cockerill, the chairman, criticized the UK Government for not providing taxpayer-funded incentives comparable to those offered to companies in the US and the European Union. He claimed that the UK was trailing in the global race to secure industries essential for the shift to renewable energy and electrified transportation.
He further commented on the significant impact the potential decline or disappearance of the UK motor sector could have on the UK economy, citing the lack of an industrial strategy as a major drawback in the competition to manufacture electric vehicles.
