Tees Valley Lithium announced the company has now received full planning approval to build the UK’s first lithium hydroxide refinery at the Wilton International Chemicals Park located in the Teesside Freeport, UK.

In response, leading international investment banking firm VSA Capital has re-rated their valuation for Alkemy, increasing the target price to from £8.40 to now £10 per share.

Comments from VSA Capital: “This is an important de-risking milestone and validates the company’s development and environmental approach with a full Environmental Impact Assessment (EIA) submitted as part of the application.

This highlighted the zero waste approach and strategy which leverages the UK’s competitive advantage in chemical engineering rather than bulk processing.

By focusing on intermediate products such as lithium sulphate and technical grade lithium carbonate ALK has an important role to play in reducing the embedded carbon within the EV supply chain associated with shipping.

Today’s derisking event enables us to lift that to 0.15x taking our target price to £10/sh, a risked valuation of around £70m compared to today’s market capitalisation of just £17m.

The backdrop for lithium remains strong and prices have continued to rise recently, however, ALK remains the only pure play listed conversion exposure, a segment of the market dominated by China.

This gives ALK a compelling strategic investment rationale which overlays the momentum in the lithium market currently.

We reiterate our Speculative Buy recommendation but increase our target price to £10/sh.”