Trafigura buys stake in Green Lithium

Commodities trading giant Trafigura has bought a stake in lithium processing company Green Lithium.

The equity investment will support Green Lithium's development phase funding round and the development of one of the first centralised commercial lithium refineries in Europe, which will supply European electric vehicle and battery manufacturers with battery-grade lithium chemicals. Details of the deal were not disclosed.

Trafigura is an established leading participant in the international nickel and cobalt trading markets. It continues to invest significant resources to diversify and develop its business across other battery metal commodities, strengthening its position as a leader in the global battery and electric vehicle value chain.

Given the importance lithium plays in the supply chain – and, more broadly, in the transition to a decarbonised, greener economy – an agreement with Green Lithium represents "a milestone" for Trafigura’s international battery metals business.

It is forecast that the growing demand for battery-grade lithium chemicals will not be met by global refining capacity that is currently available or planned. Increasing and diversifying supply will be vital for the commercial viability of the European battery supply chain and, therefore, the electric vehicle revolution and transition to net zero.

Green Lithium, which has raised around £2mn through private investment and government backing, is at the forefront of this transition. It works closely with leading international lithium mines, which will feed the refinery with high-grade lithium mineral ore.

There is currently no commercial lithium refining capability in Europe, leaving the continent’s rapidly growing electric vehicle and sustainable energy storage sectors wholly reliant on China for critical battery metals. In delivering its lithium refinery, Green Lithium expects to create the missing link and guarantee upstream supply chain security.

Green Lithium offers flexibility as a merchant refinery capable of producing different battery-grade lithium chemical products to meet dynamic end-market needs; utilising renewable energy and hydrogen in the refining process where possible to minimise CO2 emissions and wider environmental impact; creating circular economies in battery recycling whilst eliminating process waste through sustainable re-use of by-products; and delivering the project with a team that has extensive experience in successfully completing multi-billion-pound, internationally-strategic infrastructure programmes.

Sean Sargent, CEO at Green Lithium, said the electric revolution is fundamental to reducing the carbon emissions that contribute to global climate change and ensuring net-zero targets can be met.

"Green Lithium’s refinery will accelerate the adoption of electric vehicles and sustainable energy storage through the increased supply of low-carbon, battery-grade lithium chemicals – a key component of lithium-ion batteries," he said.

“Fulfilling this vision requires the right supply chain and investment partners. In Trafigura, we have found the perfect match in a company that not only has vast experience and expertise in the battery supply chain, but that is also willing to make a key equity investment to support Green Lithium in achieving its project objectives.”

Last June Green Lithium secured £1.6mn in Seed round funding in addition to £0.6mn in a UK government grant secured from the Automotive Transformation Fund.

Socrates Economou, Head of Nickel and Cobalt Trading for Trafigura, said in addition to its core business in physical commodities trading and logistics, Trafigura has a strong track record of financing and investing in mining and metals projects globally.

"This landmark project has the potential to revolutionise the European supply chain for EV production and sustainable energy storage at this critical time in the energy transition," he said.

“We’re looking forward to working with Green Lithium to support its development, as we continue to bring Trafigura’s global expertise to the fore in transforming the battery metals supply chain for a low-carbon future.”

Following its initial private funding round, securing over 5x the target amount, Green Lithium is currently raising capital to fund its development phase activity.

Seiko Hidaka, legal director at the law firm Gowling WLG, said: "This would be a welcome development, given that currently most of the lithium is produced in China, often using fossil fuels. To have a project using low-carbon refining technology such as this one would put real meaning to transitioning from internal combustion engines to electric powered vehicles from the green agenda perspective."