Britain funds satellite hunt for new minerals

* Britain hopes to be home to low carbon industry post-Brexit

* Full results of satellite research to be disclosed in March

LONDON, Jan 25 (Reuters) - The British government has handed out 850,000 pounds ($1 million) for research that uses satellites to identify deposits of minerals, including battery metal lithium, as part of efforts to bolster the economy after the exit from the European Union.

The project named the Satellite Applications Catapult is seeking to assess the quality of mineral structures, to ensure exploration spending is focused on the best deposits, by analysing satellite images of geology and vegetation, British miner Cornish Lithium, which is participating, said.

Others involved in the project include the British Geological Survey, the Camborne School of Mines, which is part of Exeter University, and environmental consultancy North Coast Consulting.

“We are very pleased with the results so far and we believe this research could lead to ground-breaking satellite applications for the exploration and mining industry,” Jeremy Wrathall, CEO of Cornish Lithium, which seeks to extract lithium from brine in Cornwall, southwestern England, told Reuters in an interview.

Full results from the project should be known in March, he said.

The British government is counting on a low-carbon car industry to help shore up the economy after the country leaves the European Union.

It has said it will ban new petrol and diesel cars from 2040, raising the prospect of a huge increase in demand for lithium.

Lithium has been primarily produced from hard rock in Australia and from evaporation in Latin America, where the sun is the energy source.

Extracting lithium from Cornish brines has been considered too costly, but new technology can make it viable, analysts say, and Cornish Lithium says its project could benefit from the development of geothermal energy in the area.

It also says its work has synergies with other projects to revive Britain’s industrial base.

Last year, Cornish Lithium announced it had reached a mineral rights agreement with Canada’s Strongbow Exploration , which in 2016 bought South Crofty, the last tin mine to close in Cornwall, and is seeking to bring back tin production there.

Strongbow would get royalties from any lithium extracted by Cornish Lithium from brine springs in the area. ($1 = 0.7144 pounds) (Reporting by Barbara Lewis; Editing by Susan Fenton)