Cornish Lithium has secured £7.2 million in UK government funding to advance its Cross Lanes Geothermal Lithium Project near Chacewater, Cornwall, marking a significant step toward developing a domestic source of lithium for the United Kingdom.
The funding comes through the UK Government’s DRIVE35 programme and will support a £14.5 million drilling and testing initiative designed to determine whether lithium can be produced commercially at the site. Cornish Lithium will match the government’s contribution on a pound-for-pound basis.
The investment will allow the company to drill two production wells, each reaching approximately 2,000 meters, while also operating a Direct Lithium Extraction (DLE) demonstration plant at Cross Lanes. The technology is expected to help extract lithium from naturally occurring geothermal waters while supporting a lower-carbon production pathway.
Exploration drilling and testing conducted in 2023 confirmed the presence of lithium-enriched geothermal waters circulating through underground rock formations at Cross Lanes. Cornish Lithium subsequently received planning approval for the project in 2025, allowing additional testing and evaluation work to proceed.
The company will also drill an appraisal well at the nearby Baldhu site near Truro. The work is intended to establish whether additional lithium resources are available in the area and could contribute to future production capacity.
Jamie Airnes, chief executive of Cornish Lithium, said the company’s projects could potentially satisfy almost 40% of the UK Government’s domestic lithium production target. The company estimates that its developments could contribute approximately £3.8 billion to Cornwall’s economy over 25 years while creating more than 700 long-term jobs.
The UK Government has identified lithium as a critical mineral for the energy transition and has established a target of producing 50,000 tonnes of lithium domestically each year by 2035. Developing local resources could reduce the country's reliance on imported lithium for electric vehicle batteries and energy-storage applications.
DRIVE35 is delivered by the Department for Business, Innovation, Science and Trade in partnership with the Advanced Propulsion Centre UK and Innovate UK. The programme supports technologies that can move toward commercial deployment and large-scale manufacturing.
Data from the new wells and demonstration plant will help Cornish Lithium assess the project's technical and economic potential and inform its final investment decision. The company ultimately aims to develop a network of modular geothermal lithium production facilities across Cornwall, potentially creating a domestic supply chain for battery materials.
Product & Chemical Commodity Price Impact
The development is bullish for lithium and lithium-based battery materials over the medium to long term, although the immediate price impact is likely to remain limited because the project is still in the drilling, testing and demonstration phase. Successful production could eventually increase regional lithium supply and reduce the UK’s dependence on imported material, placing some downward pressure on local lithium procurement costs. For commodities tracked by Chemanalyst, lithium carbonate and lithium hydroxide prices could face mild long-term pressure if Cornish production reaches commercial scale. However, stronger EV and energy-storage demand, project delays, and global supply-demand conditions will remain more influential on prices in the near term.
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