Manchester climate-tech spinout Watercycle Technologies has been awarded £3m of non-dilutive grant funding towards a £6m project to build a demonstration-scale line that recovers and refines battery-grade lithium from waste streams, addressing a gap the UK currently fills entirely through imports.
Watercycle Technologies, a University of Manchester spinout, has secured £3m in grant funding to scale domestic lithium production. The award covers half of a £6m project to establish a demonstration-scale manufacturing line capable of recovering and refining lithium from waste streams for use in electric-vehicle batteries.
Because the capital is a grant rather than an equity round, it is non-dilutive: Watercycle takes the funding without adjusting its cap table or handing existing shareholders a fresh mark. The money comes through the DRIVE35 Scale Up Fund, part of the UK Government's £4bn DRIVE35 programme, delivered by the Department for Business, Innovation, Science and Trade alongside the Advanced Propulsion Centre UK and Innovate UK.
Founded in 2020 by Dr Seb Leaper and Dr Ahmed Abdelkarim, Watercycle designs end-to-end mineral recovery and water treatment systems built for a circular economy. The company has previously raised equity funding, including a £4.4m round, and this grant pushes its technology from pilot operations towards commercial-scale demonstration.
The project, known as ReLiVE — Recover, Refine, Recharge: Scaling Lithium Extraction from Wastewater for UK Battery Production — runs for 36 months and is due to begin in April 2027. It aims to prove that battery-grade lithium can be produced reliably and competitively in the UK from circular sources rather than material mined and refined overseas.
The strategic backdrop is stark. Lithium is classified as a critical mineral by the UK Government, and demand is set to climb as EV and domestic battery manufacturing scale. Yet the UK has no significant domestic lithium refining capacity and remains heavily reliant on imported lithium chemicals.
"ReLiVE directly supports the UK's ambition to build a secure, domestic supply of battery-grade lithium," said Dr Ahmed Abdelkarim, co-founder and chief scientific officer. He added that demonstrating high-purity lithium from "circular, low-carbon sources here in the UK" could help reduce reliance on imports.
Ian Constance, chief executive of the Advanced Propulsion Centre UK, said DRIVE35 was designed to move "promising technologies to commercial deployment and manufacturing at scale."
For Watercycle, the grant de-risks a capital-intensive step without diluting founders or early backers, and positions the company to raise later commercial rounds from a stronger evidence base. The wider prize is a domestic, traceable and lower-carbon route into the battery supply chain that the UK does not yet possess.
Original source: BusinessCloud — https://businesscloud.co.uk/news/watercycle-technologies-bags-3m-to-scale-uk-lithium-production/
