Alkemy Capital Investments (LSE:ALK), the 100% owner of Tees Valley Lithium (TVL), said its subsidiary has received an Offer in Principle for capital grant funding of up to £18.3 million.
The funding falls under the UK Government's £4 billion DRIVE35 Automotive Transformation Fund, delivered by the Department for Business, Innovation, Science and Trade with the Advanced Propulsion Centre UK.
The grant targets Phase 1 of TVL's £185 million merchant lithium refinery at the Billingham Chemical Complex in Teesside, though it remains subject to final approvals and due diligence.
Phase 1 is expected to produce 25,000 tonnes per year of battery-grade lithium hydroxide monohydrate, enough for more than 550,000 electric vehicles annually, with scope to scale beyond 100,000 tonnes per year.
TVL has already secured a binding offtake agreement with Glencore, process technology from Veolia and a feedstock agreement with Wogen Resources.
Over 25 years, the project is expected to contribute more than £2.1 billion to the UK economy and support over 1,700 jobs across construction, the supply chain and operations.
"The Critical Minerals Strategy set Britain the task of creating domestic lithium refining capacity, and TVL exists to deliver it: Phase 1 alone represents nearly half of the 2035 target", said Vikki Jeckell, CEO of Tees Valley Lithium.
The company said its focus now turns to delivering first battery-grade production in the UK.
News Intelligence what this means for the company
Alkemy's Tees Valley Lithium subsidiary has secured an Offer in Principle for £18.3 million in non-dilutive UK government grant funding under the DRIVE35 Automotive Transformation Fund for Phase 1 of its £185 million Teesside lithium refinery. The grant—representing roughly 10% of the total project cost—is subject to final approvals and due diligence, but arrives with binding offtake and feedstock agreements already in place, materially de-risking the path to first production.
- Glencore, which has signed a binding offtake agreement with TVL, gains secured access to battery-grade lithium hydroxide production in the UK market.
- Veolia, the process technology provider, advances a reference installation for its lithium refining technology in Europe's first independent lithium hydroxide plant.
The grant offer validates TVL's project economics and removes a material funding gap, but does not yet constitute final capital commitment—approvals and due diligence remain outstanding. If completed, the funding would substantially improve Alkemy's path to value creation from its single disclosed major asset, though execution risk on construction and ramp-up remains.
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