War Ernst Scheider
LAKE CHARLES, U.S., June 16 (Reuters) – The global battle to transform the lithium industry is attracting oil producers, technology startups and mining companies as they race to rediscover the key metal for lithium. .
A string of direct extraction lithium (EDL) technologies are poised to tap brackish water deposits in Europe, Asia, North America and elsewhere, which the US Geological Survey says account for 70% of the world’s lithium metal reserves.
As successful EDL companies supply lithium for electric vehicle batteries in hours or days, their influence on an industry expected to exceed $10 billion over the next decade is at stake. Large evaporation ponds and open pit tunnels, which consume a lot of water.
„The world needs abundant, low-cost lithium to drive the energy transition, and EDL has the potential to achieve that goal,” said Ken Hoffman, co-director of McKinsey & Co’s Electric Vehicle Battery Materials Research Group.
Chile’s President Gabriel Boric focused global attention on the once highly specialized sector in April, outlining a comprehensive plan to phase out evaporation ponds and implement EDL on his country’s vast lithium reserves.
Boric’s announcement was particularly surprising because EDL technology had never reached commercial production without the use of evaporation ponds, sparking competition in the first place.
Interviews with two dozen clients tested EDL technologies, industry analysts, consultants and investors, including technology start-ups EnergySource Minerals and International Battery Metals (IBAT), as well as oil services provider SLB and mining giant Rio Tinto. The first to launch commercial EDL projects in the next 12 to 18 months.
French miner Eramet and Chinese resin maker Sunresin are among the early winners.
„The industry is very close to taking a giant leap forward,” said John Burba, who helped found a major EDL technology and is chief executive of IBAT.
While EDL technologies vary, they are comparable to home softeners and aim to extract about 90% or more of the lithium from brine, and 50% from ponds. This attracts not only lithium industry customers but also investors, many of whom believe EDL will lower production costs.
„EDL technologies can increase the reliability of resources that are not necessarily associated with evaporation technologies,” said Alec Lucas of the Global X Lithium & Battery Tech ETF.
Portable EDL technologies, capable of recycling most of the fresh water and limiting the use of hydrochloric acid, are considered very attractive. By 2030, 13% of the world’s lithium will be produced by EDL, according to forecasts from commodity price provider Fastmarkets.
By contrast, the U.S. fracking industry — born of radical technological advances — pumps only 5% to 9% of the world’s oil, but is considered a major influence on energy markets.
Using the shale playbook, EDL is considered the hinge producer of lithium because it can make supply quickly and shut down quickly. Global appetite for this metal is expected to reach 2.7 million metric tons by the end of this decade, almost four times more than in 2022.
„Based on demand projections, more EDL supply is definitely needed,” said Jordan Roberts, lithium industry analyst at FastMarket.
Tanks and pipes
In a rural Louisiana shipyard, IBAT has built an automated EDL plant made of thousands of feet of forest-green pipes and tanks capable of distilling 5,000 metric tons of lithium per year.
„We’re committed to being first to market,” says Gary Flowers, CEO of IBAT. The company designed its 137-meter-long plant so that it can be assembled into 32 pieces and stacked like LEGO bricks, a design it expects to be commercially producing lithium in December.
A customer looking to produce 15,000 tons of lithium per year, for example, could buy three stackable IBAT lithium plants. Compared to tens of thousands of hectares of evaporation ponds or open pit mines, the entire IBAT facility is less than 4,000 square meters.
As part of a deal to buy 40,000 lithium-rich acres in Arkansas from Galvanic Energy earlier this year, Exxon Mobil received test results showing IBAT’s EDL technology could recover 91% of lithium from brine at the site. IBAT is in talks with Exxon Mobil and Chevron about licensing its EDL technology, according to three people familiar with the matter and documents seen by Reuters.
According to two sources, EDL is in talks with Exxon EnergySource Minerals about licensing the technology.
EnergySource is building a lithium plant in Salton Lake, California, and has licensed its technology to Koch Industries-backed Compass Minerals International to mine the metal from Utah’s Great Salt Lake as early as 2025.
Exxon, Chevron and EnergySource declined to comment. IPAD does not make any forward-looking statements and said it cannot confirm any negotiations that have taken place.
For oil producers, EDL offers an exciting opportunity to extract lithium from water that is already being extracted along with hydrocarbons. Normally, that water would have to be pumped back into the ground, but EDL would allow oil companies to generate revenue. So-called produced water contains 10 to 15 times less lithium than in Chile, for example, so low concentration that it is not profitable to distill only through evaporation ponds.
Exxon shareholder Engine No. helped elect three candidates for the oil company’s board of directors in 2021. 1’s Eli Horton, „It’s the smartest thing they’ll ever see.” Costs Pay Off”.
SLB, the world’s largest oilfield services provider, plans to expand into lithium and begin operations early next year using the EDL process, which includes water treatment equipment from EnergySource technology and others.
The company, formerly known as Schlumberger, is building a small EDL plant in Nevada and is in talks with 10 potential customers, according to Gavin Rennick, head of SLB’s new energy division.
„Having a complete domestic salt resource that is now affordable is a big driver for EDL,” Renick said.
However, the mining giants did not allow new entrants to dominate the sector. Rio Tinto paid $825 million last year for an EDL project in Argentina and expects to produce 3,000 metric tons of lithium a year next year.
„We’re working hard on the process and we’re comfortable with the technology,” said Sinead Kauffman, CEO of Rio’s minerals business.
At each brine level
The EDL didn’t just receive accolades. Last year, short sellers criticized the processes developed by Standard Lithium and Lilac Solutions as potentially broken. Both companies denied it.
Last month Standard signed a deal with its biggest shareholder, Koch Industries, to deploy Koch’s EDL technology in Arkansas and hired French bank BNP Paribas to secure its debt financing.
Lilac, which is backed by BMW and Breakthrough Energy Ventures, said in April that a pilot lithium plant built by Lake Resources in Argentina produced 2.5 metric tons of lithium. Most of that has been mined since January, chief executive Dave Snydaker said.
Many saline reservoirs have different chemical compositions, meaning that one EDL technology is unlikely to emerge as a world leader. Many people in China are high in magnesium, for example Bolivians, high in potassium.
„One of the main drawbacks of these EDL technologies is that they really have to be tailored to each brine,” said Steven Schofstal of the Spratt Lithium Miners ETF.
Stellandis, General Motors and others have invested hundreds of millions of dollars in EDL companies with aggressive timelines for introducing electric fleets.
„Our opportunity won’t last long,” said Chris Dornbos, chief executive of E3 Lithium, which is developing a Canadian EDL project backed by Exxon subsidiary Imperial Oil. „We have to market it now.”
(Reporting by Ernest Scheider; Editing in Spanish by Javier López de Llerida)
