A Major Leap for Tees Valley Lithium
Alkemy Capital Investments (LSE: ALK) just dropped a significant RNS: its subsidiary Tees Valley Lithium (TVL) has secured a binding long-term feedstock agreement with Touchstone Capital Partners. This isn’t just another supply deal – it’s a cornerstone for Europe’s battery ambitions. Sourced from the high-grade Salar de Llamara brine deposit in Chile, this agreement locks in up to 100,000 tonnes of lithium carbonate equivalent (LCE) over five years, with an option to extend by 50,000 tonnes annually for two more years. First deliveries are slated for 2027, perfectly timed with TVL’s commissioning schedule.
Why This Deal Matters
Let’s cut through the corporate speak: this is transformative for TVL’s Teesside refinery project. Here’s why:
- Supply Chain Security: This covers a major chunk of feedstock needed for Train 1, de-risking the project significantly. No more vague promises – they’ve secured the raw material.
- Grade & Economics: Salar de Llamara isn’t just any deposit. Its exceptionally high lithium concentration means lower extraction costs and superior production economics. Brine extraction also carries a notably lower carbon footprint than hard rock mining – a serious ESG win.
- European Independence: This is a deliberate move to build a lithium hydroxide supply chain outside Chinese dominance. TVL is positioning itself as a critical, independent supplier for the UK and EU’s booming gigafactory sector.
Strategic Positioning in a Shifting Market
While lithium spot prices might be taking a breather, the structural demand story remains rock solid. Exponential growth in EVs, grid storage, and European green industrialisation is expected to push the market back into deficit by 2027. TVL, with its strategically located Teesside refinery and now secured high-grade feedstock, isn’t just participating – it’s becoming a linchpin.
CEO Vikki Jeckell nailed it: this moves TVL “from ambition to delivery.” Having binding agreements in place transforms the narrative. They’re not just talking about supplying battery-grade lithium hydroxide; they’re proving they can.
The Project Llamara Advantage
Touchstone’s Chilean project isn’t just a supplier; it’s a strategically aligned partner:
- High-Grade Brine: Confirmed as one of the world’s richest deposits.
- Fully Funded & On Track: Project Llamara is financed and targeting 2026 production – syncing perfectly with TVL’s ramp-up.
- Sustainability Credentials: The brine process inherently offers a lower-carbon pathway, bolstering the green credentials of the entire supply chain.
The Bigger Picture: Gateway to Europe
Touchstone Chairman Kenny Song’s comments about “jointly developing” more opportunities across the midstream/downstream sectors hint at the potential scale. This isn’t just a one-off deal; it’s the foundation of a partnership aiming to be a major player in Europe’s battery ecosystem. TVL is actively constructing the gateway between global lithium resources and European battery manufacturing.
This announcement materially de-risks the TVL project. Securing high-quality, cost-effective, and sustainable feedstock years ahead of production is a masterstroke. It provides tangible evidence of TVL’s execution capability and commercial viability. For investors watching the energy transition infrastructure space, Alkemy and TVL just delivered a very convincing proof point.
