Just outside the perimeter fence stand the hulking remains of grand stone engine houses, a testament to Cornwall’s proud tin and copper mining history.

But inside is a shiny new mini power station and lithium extraction plant that is once again accessing rich underground resources in the far south-west of Britain.

From Thursday, the Geothermal Engineering Ltd (GEL) plant near Redruth will feed electricity created by tapping into hot granite rocks to the National Grid and extract lithium from the mineral-rich water used in the process.

The switch-on, the first of its kind in Britain, has been welcomed by the government, which sees projects like this as a way of bolstering energy, and by people from Cornwall, who take pride in their mining heritage and hope for an economic boost in a deprived part of the West Country.

Ryan Law, chief executive of GEL, said he was overjoyed at the launch, which has been almost 20 years in the making. “To finally reach this point is exciting – and a bit of a relief,” he said.

GEL says the plant will generate enough renewable electricity to power 10,000 homes, with the plan to open more, bigger sites in Cornwall.

Within a decade it says it will be producing enough lithium carbonate, a key material used in the production of rechargeable batteries, to supply about 250,000 electric vehicles a year.

Law said it had been difficult at times in the past to make the argument to politicians and investors that it was sensible to drill more than three miles into the reservoirs of very hot water (about 190C) found in faults in the granite in this part of Cornwall.

“With any first technology, you’ve got to convince everyone,” he said.

“But it’s like someone has built this enormous nuclear power station underground. We are just tapping into the heat that’s generated.”

Though getting to this point has been a slog, Law said the actual process of generating heat and extracting lithium was relatively simple.

The hot water is pumped from what is known as the Porthtowan Fault Zone to the surface via a “production well” and steam drives a turbine to produce the electricity.

At this point the water temperature drops to 50C – which, coincidentally, is the ideal temperature to work with when extracting the lithium within the water.

Once the lithium is taken out, the water is re-injected into the fault line through a second, slightly shallower well, which means that over time the hot reservoir is recharged.

Law allows visitors to touch this second wellhead – it is pleasantly warm. The production one is far too hot. The site is surprisingly small – only about 0.6 hectares (1.5 acres). “The magic is happening beneath the surface,” said Law.

Charlotte Wilkins, who is in charge of the lithium plant, said it was exciting to build something new.

“Not only have we got green electricity, we’ve got lithium as well. It’s the whole package,” she said.

She proudly showed off a tube of lithium crystals. “Tiny needle-shaped crystals,” she said. “I can tell just by looking at them they are perfect.”

So rich were the reserves of tin and copper in the region that one area near the plant was once nicknamed “the richest square mile on Earth”.

During this renaissance, about 100 jobs have been created so far, including for engineers, geologists and chemists. GEL has sourced employees, contractors and raw materials locally where possible.

Greg Foxwell, who sits on Gwennap parish council, said people were pleased Cornwall’s natural resources were being used in this way.

“People here are proud of their mining heritage,” he said. “The company has gone out of its way to recruit some local people and do very good work with the local colleges and schools.”

A few people have raised concerns about earthquakes. The company accepts that the testing and development of geothermal reservoirs in Cornwall is likely to cause some minor seismicity but there have been no issues so far.

Perran Moon, the MP for Camborne and Redruth, who won the previously Conservative-held seat for Labour at the last election, said underground exploration was a fundamental part of the Cornish psyche.

“Mining isn’t what we do, it’s who we are,” he said. “We know most people think of Cornwall as pasties and scones and cream but the reality is that we’re one of the most deprived regions in northern Europe, so the premium that we place on natural resources is huge.

“Cornwall wants to play its part in the transition away from fossil fuels. There’s real drive for playing our part and regenerating our communities in the process.”

Rachel Reeves, the chancellor, hailed it as a “pioneering project” and said there was a huge opportunity for Cornwall to become “a vital player” in Britain’s energy security.

Frances Wall, a professor atthe Camborne school of mines at the University of Exeter, said the switch-on was a “really significant event” for Cornwall and the UK.

Harry Pitts, head of humanities and social sciences, Cornwall at the university, agreed it was an important moment.

“The revival of resource extraction in Cornwall should be seen as emblematic of ‘securonomics’, the ambition of this government to reset the national economy towards greater sovereign capability in key inputs like critical minerals and energy,” he said.

“As well as promising skilled jobs for local working-class communities, Cornwall’s mineral and geological wealth is crucial for the future security and sustainability of the country as a whole.”