New Lithium-Extraction Technology Attracts Investors. But Is It Viable?

Lithium is an important component of rechargeable batteries and the development of its domestic supply is seen as an important step in a broad push for the US to switch to alternative energy sources. In February, the Biden government revealed plans to invest $2.9 billion to promote advanced battery production and strengthen the US battery supply chain, including the development of domestic lithium supplies. Last month, President Biden also invoked the Defense Protection Act to increase production of battery metals.

But newer, still experimental lithium production and extraction methods that could help increase inventories while attracting investors because of their potential to speed up production and reduce environmental impact compared to most current lithium extraction methods, are yet to be discovered. widely unproven.

Current methods of lithium production usually involve extracting the lightweight metal from hard rock or pumping the salt brine containing lithium from the ground into vast ponds where evaporation separates it from other elements. Mining companies in Chile have been practicing this environmentally hazardous practice for decades. It takes about 18 months to two years to produce lithium from a brine using ponds and several years to build such projects.

Promising efficiency

The new methods, collectively known as direct lithium extraction or DLE, have been shown to be faster than traditional methods and more efficient. While traditional methods yield about 40% to 50% of the lithium in a mined well, processes using DLE can extract 75% to 90%, companies behind the technologies say. Many DLE technologies use a chemical process or other methods to isolate lithium.

That means more lithium can be produced and made commercially available faster — at a time when lithium demand is pushing prices to record highs, while analysts predict shortages that could slow down electric car production.

Containers of lithium brine at a Lilac Solutions warehouse in Oakland, California.


Photo:

Christie Hemm Clock for The Wall Street Journal

“We want to dramatically accelerate the amount of time it takes to bring a project online,” said David Snydacker, chief executive of Lilac Solutions, an Oakland, California-based startup that has developed DLE technology. Projects that previously took seven to 10 years to start production will be able to be produced in about four years using Lilac’s DLE methods, says Mr. Snydacker.

Lilac raised $150 million in late 2021 from investors such as the venture capital fund of BMW AG and T. Rowe Price Associates Inc.

Backed by Bill Gates’ Breakthrough Energy Ventures, Lilac is working with Australian companies to extract lithium from salt brine in the Salton Sea in California and Argentina. One of the companies partnering with Lilac recently announced a preliminary agreement to supply Ford Motor Co.

with lithium.

Another innovator in DLE technology, Standard Lithium Ltd.

SLI 2.76%

, based in Vancouver, British Columbia, said in December it raised $100 million from a unit of Koch Industries Inc. Standard is working with a German chemical company on a lithium extraction project in Arkansas that it says will benefit from a proprietary DLE process. Skeptics betting that its stock will fall say the process isn’t working and the company is behind schedule. Standard has called these allegations false and misleading.

Prospecting in Nevada

In Nevada, where the soil is rich in lithium brine, a spate of lithium seekers has made claims for potential projects over the past year. However, many conventional attempts to mine lithium have encountered opposition from environmentalists and allowed delays.

DLE will be “the game-changer,” said Cortney Luxford, liquid minerals program manager for Nevada’s Division of Minerals. “If you can get more refined lithium on the market in weeks or days, that changes the economy of companies.”

The question is whether DLE is ready to make a big difference. Many DLE technologies that work well in a lab often run into problems in the field, experts say. Many of the technologies would likely still require large amounts of water and power to run the devices on a large scale.

“Right now it’s still very theoretical,” said Chris Berry, founder of House Mountain Partners LLC, an advisor to battery metal companies and investors.

DLE is currently only used commercially by Philadelphia-based lithium miner and processor Livent Corp.

LTHM -3.54%

, in addition to the other brine extraction processes in Argentina, and by companies in China. The DLE component of Livent’s Argentina project is small and does not produce lithium on a scale that would indicate a technology breakthrough, analysts say. And experts say there isn’t enough transparency about the DLE technology used in China to know how successful it is.

Lilac Solutions chemist Maddie Cooke prepares samples to test how much lithium is in the brine the company has acquired.


Photo:

Christie Hemm Clock for The Wall Street Journal

Mr. Snydacker of Lilac says his company has successfully completed a large-scale pilot program at an undisclosed location in the US. The company says it will use the $150 million it raised last October to increase production, expand its workforce and deploy its technology. It is working on projects in Nevada and North Dakota in addition to projects in California and Argentina.

The challenge of scale

Albemarle in North Carolina Corp.

ALB -0.75%

, the world’s largest lithium producer, has evaluated a range of DLE methods and companies and says it is testing the most promising candidates on select lithium sources. Glen Merfeld, chief technology officer, says there is potential to increase lithium production with DLE, but a number of factors require attention, such as project profitability and sustainability issues.

“It could look great in a cup,” says Mr. Merfeld. “Even in a small pilot it could look great. But to be really viable and competitive, you have to take it to the big scale.”

The access road to Albemarle’s lithium evaporation ponds at the factory in Silver Peak, Nev. It is the only active lithium mine in the US


Photo:

Ernest Scheyder/Reuters

He says the company plans to expand its mine in Silver Peak, Nev., which uses traditional methods and is the only active lithium mine in the U.S.

EnergyX, a private Houston-based company looking to produce lithium using membranes in its DLE extraction process, says its method can currently extract up to 90% of the lithium in brine. The company, which has raised $20 million from investors including the University of Texas, has been investigating how it works in Bolivia, a lithium-rich country whose government has long opposed private mining activities.

But EnergyX’s membrane doesn’t filter out salt and some other impurities in brine, meaning other methods, such as ponds, are still needed to purify the lithium, according to people familiar with the technology.

EnergyX CEO Teague Egan said in an email to reporters that his company’s initial technology will work alongside existing production methods such as ponds, but that future iterations will not need it. The company is currently trying to raise more money from investors, according to people familiar with the plans.

“Lithium and battery materials are absolutely essential,” Mr Egan said in his email. “Companies are working very hard to find workable, sustainable solutions for the sector.”

Mr. Patterson in Washington and Mr. Ramkumar in New York are reporters for The Wall Street Journal. They can be reached at scott.patterson@wsj.com and amrith.ramkumar@wsj.com.

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