A Peak At The Efforts Of Two American Lithium Companies

In two previous articles, I have discussed China’s commanding lead in the rapidly-growing lithium industry. In a nutshell, it’s because China has invested heavily into developing its lithium supply chain, while the U.S. has lagged far behind.

However, a number of companies are working to commercialize a lithium industry in the U.S. The most well-known example is undoubtedly the Tesla Gigafactories that are being built to produce lithium-ion batteries domestically.

Just to put that in perspective, though, according to the New York Times Chinese lithium-ion battery maker CATL is building factory over three times larger than Tesla’s Nevada facility. Further, CATL presently has eight factories under construction at a price tag of over $14 billion, underscoring the investments China is making toward securing continued market control.

But there are other efforts underway in the U.S. Last week I spoke with the CEOs of two American companies working on lithium commercialization efforts.

EnergyX

One of those men is Teague Egan, the CEO of EnergyX. Mr. Egan’s company has developed a technology to extract lithium from brine. For the past year and a half, he has been testing different brines and perfecting his lithium-extraction technology.

He was in Bolivia when I spoke with him, preparing for a pilot test to demonstrate his technology with Bolivia’s lithium-containing brines.

In addition to explaining how his technology works, Mr. Egan provided a number of insights on the industry. I asked him why he believed China is dominating this industry, and he said “Two reasons. One, China is willing to invest where the resource is. Second, China has been building the supply chain for years.”

I asked why he is testing his technology in Bolivia. He said that Bolivia has the largest lithium resource in the world, and the country has spent $1 billion to turn those resources into reserves.

He told me that the lithium resources he works with are primarily in salt flats. They drill through the salt, and then pump the underlying water into evaporation ponds. Through a series of evaporation ponds, they evaporate water and precipitate sodium salts in one pond, then potassium salts in other.

Lithium is concentrated in these steps, but some is co-precipitated with those other salts. Mr. Egan told me that his company’s technology can capture ~90% of the lithium in the brine. As he explained, the EnergyX technology complements and utilizes existing ponds and invested infrastructure, therefore making it an exponentially more economical approach.

Mr. Egan said the difference in the U.S. and South America is that lithium is present in the brines there at a concentration as high as 1,800 parts per million (ppm). In the U.S., the typical concentration in a brine may be 100 to 200 ppm of lithium. Thus, you get a lot more lithium there for each gallon of water processed. “It’s the lowest-hanging fruit,” he told me.

Still, he said his technology will work at concentrations typical of U.S. brines. I asked him about extracting lithium from the ocean, and he said “The problem there is the concentration is under 1 PPM. So even though there is a lot overall in the oceans, it isn’t economical to extract it.”

Galvanic Energy

One of the companies working to commercialize lithium production in U.S. brines is Oklahoma-based Galvanic Energy. I spoke with CEO Brent Wilson about the company, which was formed in 2018.

The company’s roots go back to Chesapeake Energy, where Mr. Wilson formerly worked. His background is in geology and water chemistry. One of the things oil and gas producers have to deal with is water that is produced along with the hydrocarbons. In fact, as he explained, most of what is pumped up is often water, which is separated from the hydrocarbons and then treated as waste. Some of the produced water in different areas contains valuable elements, including lithium.

He explained that there is a company called Iofina that has become one of the world’s largest producers of iodine by extracting it from produced water in Oklahoma’s Woodford formation. That became his company’s model, except their primary target was lithium.

They looked throughout the U.S. at produced water. They did exploration like you would do for oil and gas. They constructed 3D geo-models. They finally found a large area with the characteristics they sought.

The Smackover Formation in Arkansas was once a prolific oil producer, but they focused on the high lithium and bromine concentrations in the water below the surface. Bromine is already commercially produced from the formation, and the lithium concentration in the brine under Galvanic’s 100,000 acres averages 325 PPM, making it the most concentrated lithium brine prospect in North America. Mr. Wilson told me that there is enough lithium underlying this prospect to produce batteries for 50 million electric vehicles (EVs) — assuming you recover all of the lithium.

“Water chemistry, geology and mineral acquisition are our strengths”, he told me. “We have done the exploration work. We have acquired the acreage. The test wells we are drilling support our interpretations.

He explained that they will pump water from the ground, do a chemical exchange process to remove lithium and bromine, and then pump the water back into the ground. He told me they are currently sending out brine for testing with various extraction technologies, so they can select the best one for their process.

Most importantly, Mr. Wilson told me that Galvanic Energy is focused on ESG-centric solutions to energy resource development. He said that Galvanic’s approach to using limited surface area and a closed-loop water system is a “vast improvement over unsightly open pit mines and water-wasting evaporation ponds.” Additionally, domestic sources of lithium create far lower carbon emissions since they don’t require global transport of raw and produced materials via diesel-guzzling tanker ships. It also creates and supports American jobs.

The Road Ahead

Of course the big question will be whether American lithium resources can be competitive with resources in South America with much higher lithium concentrations. This is where a dedicated national strategy will help.

I asked the EnergyX team what they felt the U.S. government should do to help domestic lithium companies. They responded:

“1) Foreign relations / partnerships with LATAM governments  

The U.S. needs to strengthen ties and investment with Latin American governments, particularly in the lithium triangle (Bolivia, Argentina, and Chile). Having strategic partnerships there is important in order to meet clean energy goals both internationally and domestically. 

2) Government investment in DLE

The U.S. Government should focus more investment into direct lithium extraction (DLE) technology. DLE technology reduces the environmental impact significantly. To fight the climate crisis we will need lithium, but we have to make sure it is extracted responsibly. 

3) Clear policy on lithium as a key driver of the energy revolution

Lithium is going to become one of the most important resources in the next 10 years – it’s critical to the energy revolution and we need policies in place to reflect this.” 

In addition to speaking with these two companies, I heard from around half a dozen other companies working to build a lithium industry in the U.S. There is obviously a lot of activity in this space. We need to foster the efforts of these fledgling lithium companies in the U.S. to ensure that we aren’t forever dependent on China for this element that will be so critical for our future.