Alkemy Capital are pushing full steam ahead with development plans for Europes largest lithium hydroxide refinery with full planning permission granted and an MOU with BP to use green hydrogen.
Alkemy Capital’s plans for Europe’s largest lithium hydroxide refinery in Teeside just took another important de-risking step forward with the announcement that the company’s wholly owned subsidiary ‘Tees Valley Lithium’ (TVL) have received full planning permission for the lithium hydroxide refinery at the Wilton International Chemicals park in Teeside.
You can read more about the company in my full research note here and in my last blog (which has achieved nearly 3000 reviews) I covered the release of the feasibility study which gives the project Pre-tax net present value (NPV) of GBP2.8 (US$3.9) billion.
The news has been rolling in thick and fast despite a ‘subdued’ market, reeling from a number of macro head-winds, nonetheless Alkemy are pushing forwards at real pace now aiming to start production in 2025.
BP & TVL sign MOU for Green Hydrogen
Last month Alkemy reported that TVL had entered into an MOU (Memorandum of Understanding) with BP. That’s BP’s Alternative Energy division which will be developing a large green-hydrogen electrolytic production facility at Teeside.
The agreement will see BP supply green hydrogen to TVL and the partnership will also jointly evaluate the feasibility of further decarbonising TVL’s processes and energy requirements via a switch form natural gas to green hydrogen.
So not only is Alkemy/TVL looking to produce Europes largest lithium hydroxide processing facility, it’s looking to produce the world’s lowest carbon facility. I suspect as this project progresses and with the names involved there will be some serious exposure coming Alkemy’s way and is already evident by various articles appearing in the Telegraph and the BBC Teesworks electric car battery refinery approved
Planning Permission Granted for Europe’s Largest Lithium Hydroxide Refinery
Last week Alkemy reported probably one of the most significant pieces if news to date following the feasibly study and an important de-risking step. The company announced full planning permission has been granted for the lithium hydroxide refinery at Teeside.
Over the preceding 18 months, a full EIA (Environmental Impact Assessment) was completed culminating in the grant. Following receipt of planning permission TVL’s US$300 million zero waste facility is now shovel-ready with production forecasted to commence in 2025, generating over 1,000 local jobs.
As mentioned in my research note, the company will eventually produce 96,000tpa of lithium hydroxide and will be reached via a four-stage production ramp up. The project is now essentially ‘shovel ready’ and once at full production the refinery will provide 15% of Europe’s lithium hydroxide demand making it likely in my opinion that full offtakes will be secured early. In fact the company have already signed an MOU with global metals trader Traxys to source lithium feedstock as mentioned in my last blog.
Essentially, all the pieces of the puzzle are rapidly falling into place!
Brokers up Target Price based on significant de-risking
Off the back of recent significant news, brokers have upped their share price targets for Alkemy with VSA Capital issuing a £10 per share price target reflecting progress and de-risking made to date
The recent fundraise has allowed the company to advance the project FEED (Front End Engineering Design) and to complete the planning process. Alongside further news on these important milestones, investors could see further feed-stock supply agreements and news on the financing process.
The company have also reported they are in advanced discussions with a number of offtake customers including European gigafactories and electric vehicle OEM’s so we could see announcements on these at any time too.
Similar to Pensana who have recently started construction on the Saltend Rare Earths processing facility (another Paul Atherley project), Alkemy/TVL will be able to look at funding options including Government grants/funding, Green bond/debt type instruments and Private Equity (with interest already in this area) to achieve the overall funding required for phase 1 of the project.
With a huge impetus on green energy and the UK’s levelling up strategy, Alkemy look well placed too fast track this important project now that further significant milestones have been achieved – watch this space !
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Research materials prepared based upon my own analysis and research. Accuracy cannot be guaranteed and research notes should not be taken as investment advice. Please always do your own research.