London Banker Stakes Claim in Ancient Mining Area on Lithium Bet

  • Investec’s Wrathall secures exploration rights in Cornwall
  • Lithium demand has surged as electric-vehicle sales increase

A London banker has joined the rush for one of the world’s hottest metals by staking a claim in an ancient U.K. mining region.

Jeremy Wrathall, head of mining research at Investec Plc, secured exploration rights to swathes of land in Cornwall, where mining dates back to before the Roman Empire. He says the region -- famous for its tin and copper mines -- is rich in lithium, a vital material used in electric vehicle batteries.

Lithium prices have surged amid a supply shortage and rising demand for electric cars. Battery-grade lithium in China jumped to more than $20,000 a metric ton from about $7,000 in mid-2015, consultant CRU Group estimated last year. By 2040, about one-third of all light vehicles sold will be electric, equivalent to 41 million cars, according to Bloomberg New Energy Finance.

“It’s got to be the most exciting mineral out there, it’s a metal of the future,” Wrathall, who has worked at Deutsche Bank AG and UBS Group AG, and co-founded brokers Haywood Securities and GMP Securities, said in an interview. “We’re hoping to establish a new industry in the U.K.”

Lithium supply is dominated by four producers -- Rockwood Holdings Inc., Soc. Quimica & Minera de Chile SA, Albermarle Corp. and FMC Corp. -- who control as much as 90 percent of the world market. Other smaller firms are looking to get into production amid rising prices. One of them, Galaxy Resources Ltd., saw its shares more than quadruple in Australian trading last year.

Wrathall started a company called Cornish Lithium with Derek Linfield, a lawyer who has specialized in natural-resource deals, and made agreements with at least three landholders in Cornwall to explore about 74,000 acres. They include the Tregothnan Estate and Strongbow Exploration Inc., a Canadian mining company seeking to reopen Cornwall’s iconic South Crofty tin mine.

Wrathall has links to Cornwall -- he studied at the Camborne School of Mines in the 1980s, a century-old mining university named after the town bordering South Crofty. He said his research included analyzing old geological reports for lithium, long before it had a commercial use.

Cornwall and neighboring west Devon have been mined for more than 3,500 years, supplying Roman infrastructure and materials for the U.K.’s industrial revolution, according to Unesco. By the early 19th century, the region provided two-thirds of the world’s copper and was home to about 2,000 tin mines.

Cornish Lithium expects its initial exploration program to cost about 5 million pounds ($6.1 million) and will start looking for funding. While the firm plans to list shares in London at some stage, Wrathall acknowledges that it’s far from a sure thing.

“Like any mining project, there is always risk,” he said.

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