The refinery, which is being developed in northern England by Green Lithium, will receive feedstock – a raw material used in processing – from Trafigura, one of the world’s largest metals traders.
Trafigura also plans to sell the finished product made by the 50,000 tonne-a-year plant to customers in Europe.
Most of the world’s lithium comes from rocks found in Australia or from salt lakes in Chile, Bolivia and Argentina. Much of it is then shipped and processed in China, often using fossil fuels.
Lithium batteries will be a key part of the UK’s net-zero energy transition, playing a role in storing renewable energy sources and powering cars.
There is currently no commercial lithium refinery in Europe, leaving the continent’s growing electric vehicle and sustainable energy storage sectors reliant on China’s plants.
Green Lithium promises to be a solution to this and the growing demand for battery-grade lithium chemicals, which it says will soon outstrip supply.
It aims to have the plant running by the end of 2024, supporting 1,000 jobs during construction and 200 after completion.
The company says it will use low-carbon technology in its processing.
Sean Sargent, chief executive of 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.”