Credit to Author: Zachary Shahan| Date: Sun, 23 Aug 2020 07:07:04 +0000
Published on August 23rd, 2020 | by Zachary Shahan
August 23rd, 2020 by Zachary Shahan
A few weeks ago, one of our writers wrote up a story on the company Standard Lithium and its plan to get lithium for EV batteries in a new, innovative way. Tesla CEO Elon Musk responded on Twitter that he thought the approach had “a lot of potential.”
This has a lot of potential. Lithium is pretty much everywhere.
— Elon Musk (@elonmusk) July 27, 2020
Since I had already started having conversations with Howard Klein and Rodney Hooper of RK Equity to learn more about lithium mining and refining for EV batteries, Tesla’s lithium sources, and the catch-22 in the industry right now, I decided to ask them for a conversation on Standard Lithium and other potentially up and coming approaches to lithium extraction.
Howard noted in our podcast discussion that it is indeed noteworthy that Standard Lithium has advanced to a “significant demonstration plant stage.” Also, before that discussion, he wrote:
“Elon’s right to say they look promising, but as he also said, clay and brines are hard to produce high purity lithium hydroxide. Just like new battery tech breakthroughs, none have been commercialized yet so capex and opex aren’t known. And these processes tend to produce carbonate not hydroxide so need to add an extra step (cost) to make hydroxide.
“We are believers in an ‘all the above’ strategy:
“HOWEVER, Tesla biggest suppliers today, Albemarle and Ganfeng, provide his hydroxide from hard rock (from Australia to China), which, like the lithium-ion battery, is the most proven technology — most consistent, generally lower cost, generally more secure coming from Australia, which is NOT politically volatile like Bolivia or Argentina or Chile and doesn’t have water/indigenous issues.
“A third Tesla provider, Livent, makes hydroxide from Argentina brine.”
Update: Stefan Debruyne, Director Business Development at SQM, has added some more information to this matter. He notes that it is not true that it is not possible to produce battery-grade lithium hydroxide from brine. “This is a common misperception, promoted by Lithium hard rock miners, however it is simply incorrect,” he noted.
“SQM has been producing Lithium Hydroxide battery grade from Atacama brine since many years. Our current LiOH capacity is 13.5 kMT and we are expanding this year to 21.5 kMT. That’s enough to potentially supply lithium for more than 250,000 80kWh battery packs per year.”
That’s just the background, though. What I was curious about and Howard and Rodney were happy to chat about was the landscape for these unconventional options.
Regarding Standard Lithium, Howard explains that it had a joint venture with the German company Lanxess AG, “which operates a large bromine project in Arkansa, and within the bromine is lithium … so, Lanxess considers that lithium waste — or they don’t do anything with it — so Standard Lithium approached Lanxess and said, ‘we can take your waste and convert it into sellable lithium.’” One interesting thing here is that Standard Lithium doesn’t own its lithium source in this case, which is highly unusual in the lithium mining business. Therefore, the partnership allows Standard Lithium to potentially make a business on little (well, less than usual) capital investment, and Lanxess has the potential to make money on something it previously considered useless.
“The deal that they cut is that
Standard Lithium Lanxess will finance the full buildout — on a commercial scale of the project — and for that Lanxess will get 70% of the company and Standard Lithium will get 30% of the company.” That’s the economics of that plant/deal.
“And it is interesting. But it’s not proven. There are still many steps that Standard Lithium needs to go to.” (Update: Howard accidentally said Standard Lithium would finance the buildout, but it is Lanxess that is financing it, so the quote above has been updated.)
He also explained the typical steps you go through in the mining business for a project, which are:
Standard Lithium is at the preliminary economic assessment stage.
As to whether it gets commercialized, Rodney and Howard couldn’t say, but Howard commented, “In general, we think that DLE technologies — this is a direct lithium extraction technology that’s being applied to a bromine, but they also apply to oil fields and geothermal — we believe that some of them will work, and they will likely contribute to supply post-2025 in some reasonable volumes.
“But it doesn’t solve at all a near-term shortage problem we see, in lithium hydroxide in particular, and that’s going to need to be met by more conventional technologies — in particular, hard rock spodumene mines converted directly to hydroxide.”
I asked Rodney and Howard to also give a kind of breakdown of how these different sources break down in terms of commercial operation/contribution today (versus just being an idea or at an early stage):
Rodney noted that hard rock and conventional brine are “in full swing,” and there is some unconventional direct lithium extraction (DLE) happening right now in Argentina, by Livent. “To some extent, it uses traditional brine ponds, but then it does a selective adsorption process in order to improve the quality of its carbonate before it ships off for reprocessing.
“The one that is still on the block to happen is sedimentary clay, but Ganfeng, which is the second largest lithium producer in the world, [has] bought into a company called Bacanora [to] give clay a run in Mexico at the Sonora project. And then you’ve got Lithium Americas in Nevada.”
Rodney also spoke for a moment about a geothermal brine company Elon Musk bid for in 2016. “If you remember, Elon Musk bid for Simbol, in 2016,” a geothermal brine near the Salton Sea in Southern California. “That project continued, and it’s now called EnergySource, and it has a definitive feasibility, I think, and it’s actually getting close to — I think it’s ready for financing and production.
“The appeal with geothermal is … you’re already pumping up the brine to generate the energy, so the lithium guys can treat it already and it’s at surface.”
I also asked Howard and Rodney if they could mention and give a short intro to a few other potentially successful companies or projects that are “on the horizon, speculative, but something to consider.” Howard noted that he does this on a monthly basis, tweeting out a market scorecard on these topics. “I publish a list of producers, funded developers, which is only one, and then a list of about 30 hopefuls, companies that are at either a very early stage of development — they could be $5 or $10 million market cap, up to $150 million market cap companies, which include a company like Standard Lithium, which has less market cap than that, but have raised $50 million, have advanced to a [preliminary economic assessment] or a pre-feasibility study level.”
Mr Market Scoreboard #Lithium
Decoupling from China spod/carb?
ASX cover shorts $ORE $GXY
EU ❤️ green spodumene. ~5% debt $PLS $SGMA
Enter US retail speculation on US/TSX stories $LAC $SLL $PLL $CYP ($NNO too) #Velocitility
Skeptical Instos👀on $ALB $LTHM (Aug 6) Q2 Calls pic.twitter.com/rcFrYL7iSb
— Howard Klein (@LithiumIonBull) August 1, 2020
There’s much more in the podcast, so I recommend a full listen. Also, see my previous conversations with Rodney and Howard and the stories that came out of them:
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Zachary Shahan is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he does not offer (explicitly or implicitly) investment advice of any sort on Tesla or any other company.