The Government has invested in a company hoping to help end Britain's reliance on China for a key electric battery component.
Livista Energy's bid to set up one of the first lithium refineries in Europe has won support from the Government. The new plant, set to be built in England, will produce the materials required to build batteries for electric vehicles.
Livista's co-founder Roland Getreide told the Financial Times: "The electrification of the car fleet means a whole new supply chain and the UK Government has chosen us to explain the process and how to build a refinery here."
The funding will help Livista pick a location for the refinery, Mr Getreide said.
Britain and the European Union have been trying to end their reliance on China for refined lithium amid concerns about security of supply. Lithium is set to be a key material in the coming decade as the world shifts towards electrification.
China is the biggest refiner of lithium in the world, though it sources most of the raw metal from beyond its borders according to S&P Global.
Britain has deposits of lithium and start-ups Cornish Lithium and British Lithium are exploring commercial mining.
The Daily Telegraph revealed last month that Green Lithium, another British start-up backed by the world’s biggest private metal trader Triafigura, is also considering setting up a refinery in Teesside.
The funding for Livista came as part of a £43.7m package of co-investment from the Government and the automotive sector for 21 projects aiming to decarbonise the car industry.
Lord Gerry Grimstone, minister for investment, said: "By investing in projects, such as electric motorcycles, to develop the latest clean auto tech or to investigate the potential for further growth in UK electric vehicle manufacturing, we are not only keeping the UK at the forefront of this vital sector, but also securing potentially thousands of highly-skilled jobs for the future."
The Government also announced it would invest £4m in a rare earth refinery to be built in the Saltend Chemicals Park in Yorkshire.
The plant recently received planning approval from local councillors and will be built by rare earth metals company Pensana.
Rare earth metals are required to manufacture essential equipment for the healthcare sector and the military.
China provides around 98pc of the EU's requirement for rare earth metals after heavily investing in the production capacity needed for processing and exporting them.