Tees Valley Lithium (TVL) and Canada’s E3 Lithium have established a preliminary framework to process lithium carbonate from the Clearwater project in Alberta into battery-grade lithium hydroxide at TVL’s proposed refinery in Billingham, northeast England.
The non-binding heads of terms cover up to 50,000 tonnes of lithium hydroxide over an initial 10-year period. If distributed evenly, the volume would equate to approximately 5,000 tonnes a year, although annual nominations, processing charges and minimum volumes have yet to be agreed.
Billingham refinery designed for third-party feedstock
TVL is developing a merchant lithium refinery rather than an integrated mining and conversion operation. Its first processing train is designed for approximately 25,000 tonnes of lithium hydroxide annually, with planned longer-term expansion to more than 100,000 tonnes a year. If the E3 framework becomes definitive and deliveries follow an even schedule, the proposed volume would use roughly 20% of Train 1’s initial capacity.
TVL has previously estimated Train 1 capital expenditure at less than US$245 million, with first production targeted for early 2028. The company also has a binding agreement with Glencore covering up to 10,000 tonnes of annual lithium hydroxide offtake.
Clearwater supplies Canadian lithium feedstock
Under the proposed arrangement, E3 Lithium would retain exposure to its lithium material while securing access to European conversion capacity. The Clearwater project contains Canada’s first declared lithium-in-brine proven reserve, estimated at approximately 1.29 million tonnes of lithium hydroxide monohydrate equivalent. Its development model uses direct lithium extraction followed by carbonate production and overseas conversion. The preliminary arrangement is not yet a binding supply contract. Clearwater has not reached full commercial production, while TVL must still complete project financing and construction.
Commercial terms remain under negotiation
The economics of any future tolling arrangement will depend on factors including carbonate purity, conversion recovery, reagent and energy costs, transportation from Alberta to Teesside and responsibility for off-specification material. A definitive agreement would provide TVL with an identified upstream feedstock source while giving E3 a potential conversion route into the European cathode-material market. The current framework, however, does not yet establish committed refinery utilisation or bankable feedstock revenue.
