Startups are zeroing in on cleaner ways to mine the lithium needed for electric vehicles
Teague Egan's tour of Bolivia's famed salt flat in 2018 changed the trajectory of his career.
The flat is called Salar de Uyuni. The seemingly endless expanse of chalky white crust is home to the world's largest reserves of lithium, a key ingredient in batteries. The flat is largely untapped.
Egan saw an opportunity.
Lithium is a pivotal material in batteries because it helps store energy and can be recharged. Demand for the metal could grow more than 40 times by 2040 as countries try to meet climate goals by moving away from fossil-fuel-powered cars and electric grids.
Most lithium is extracted in two ways — and they haven't changed much in decades and can harm the environment. One is open-pit mining; the other is pumping salty water, known as brine, into large evaporation ponds where the sun helps concentrate lithium over time. These approaches require a lot of land, water, and chemicals, and leave waste behind.
"Lithium has never been needed like this before, so there hasn't been a lot of research and development," Egan, an early investor in Tesla, told Insider. "I saw an opportunity to reinvent how it's produced. That's what got me excited."
Over the past five years, Egan, the founder and CEO of EnergyX, pulled together a team of 55 people — 30 of them scientists and engineers — to develop technologies to produce lithium from brine underneath the Earth's surface. The Austin-based EnergyX is among a roster of startups and mining giants testing what's called direct lithium extraction, which can pull out far more lithium in less time and might let miners skip evaporation ponds altogether.
Demand for lithium and other minerals will soar in the coming decades, so the pursuit reflects mounting pressure on the mining industry to clean up its environmental record. Even though research shows that switching from gas-powered cars to EVs significantly reduces greenhouse-gas emissions — even when accounting for mining raw materials — communities where mines are located have often been left to grapple with ruinous consequences.
Hundreds of new mines for the energy transition
The market analyst Benchmark Mineral Intelligence found that 384 new lithium, cobalt, nickel, and graphite mines could be needed globally by 2035. That raises alarm among conservation groups and Indigenous tribes who often live on or near land where metals essential to the energy transition are located.
At least in the near term, most lithium supplies will continue to come from open-pit mining and brine from evaporation ponds because the new technologies being tested by EnergyX and other companies haven't reached commercial scale. EnergyX doesn't expect to be fully commercialized until 2025.
But the field is moving fast. The US isn't a major lithium miner, but 15 projects across the country are at various stages of development and nearly half involve direct lithium extraction, according to Insider's review of a list compiled by Jay Turner, an environmental studies professor at Wellesley College. Turner and his students started tracking the investments in the EV supply chain in North America after President Joe Biden signed the Inflation Reduction Act last year.
To qualify for tax credits, the IRA requires an escalating percentage of lithium and other critical minerals in a battery to come from the US or a country with close trading ties to the US. That percentage will rise each year until it reaches 80%.
Minimal fresh water and chemicals
Egan said EnergyX's pilot in Bolivia last year demonstrated a 94% lithium-extraction rate from brine in evaporation ponds in a few days, much higher than the current industry standard of 30% over 18 to 24 months. EnergyX's technologies involve sending brine through resin beads that absorb the lithium. The process also adds solvents to concentrate and extract the mineral and uses membranes to filter out impurities. Egan said that minimal fresh water and chemicals are used, and brine can be reinjected back underground to minimize disturbances to the water table.
EnergyX lost a bid to help develop Bolivia's lithium resources; the government in January chose Chinese firms instead, which also plan to use direct lithium extraction rather than evaporation ponds.
EnergyX is building five other test beds, including in Chile and Argentina, which, along with Bolivia, comprise what's called "the Lithium Triangle." In April, Chile, the second-largest producer of the metal behind Australia, announced plans to nationalize its industry and favor direct lithium extraction.
The three other EnergyX sites are in the US, including California's Salton Sea. That region is a major test bed for direct lithium extraction, in part because hot brine is already being pumped to power geothermal power plants. Three companies — Berkshire Hathaway Energy, Controlled Thermal Resources, and EnergySource Minerals — are leading the development.
Controlled Thermal Resources told Insider it expects to deliver 25,000 tonnes of battery-grade lithium hydroxide in 2025, and EnergySource Minerals predicts a similar timeline for its first deliveries.
The California Energy Commission estimates the Salton Sea region is capable of pumping out 600,000 tons of lithium annually, more than what the world produces today.
All the momentum is aided by automakers eager to secure lithium supplies with lower environmental impacts. General Motors' venture-capital arm led a $50 million fundraising round for EnergyX, and it has a partnership with Controlled Thermal Resources.
'The world needs these critical minerals'
But until direct lithium extraction can be done at scale, automakers still need to source lithium from open-pit-mining sites or the brine from evaporation ponds to keep pace with the growing demand for electric vehicles.
In January, General Motors made a $650 million investment in Lithium Americas, which is developing an open-pit lithium mine in Nevada called Thacker Pass. Earlier this year, a federal appeals court refused to temporarily halt the project while considering a lawsuit filed by environmental groups and several tribes who argued that Thacker Pass is on sacred land.
Tim Crowley, a spokesman for Lithium Americas, said in a statement to Insider that the company is building Thacker Pass based on a decade of analyses and engagement. The project will recycle more than 80% of the water used and mostly be powered by a carbon-free, heat-capture system.
He added that while direct lithium extraction is promising, it is still mostly speculative and would likely only meet a portion of the supply gap for lithium for at least several decades.
Albemarle, which counts Tesla and other automakers as customers, operates the only active lithium mine in the US in Silver Peak, Nevada, by tapping brines from evaporation ponds. The company aims to double Silver Peak's production by 2025 as well as reopen an open-pit-mining site in North Carolina known as Kings Mountain. The moves are part of the company's larger global expansion plans for lithium across the US, Chile, and Australia to further cement itself in the electric-vehicle supply chain.
Ellen Lenny-Pessagno, Albemarle's global vice president of external affairs and sustainability, told Insider that the company is trying to expand in an environmentally and socially responsible way.
Albemarle plans to eventually have all its mines audited by the Initiative for Responsible Mining Assurance, a voluntary third-party standard that is more rigorous than US mining laws. One operation in Chile's Salar de Atacama is already undergoing review. The company is investing in renewable energy, technology that reduces freshwater use, and engaging with local communities about the environmental impacts, Lenny-Pessagno said.
"There are impacts," she told Insider. "There are impacts if you build a city park. But there's also a lot of positive things we're bringing along the way. The world needs these critical minerals."
Albemarle is exploring direct lithium extraction and has its own technology for this. The company evaluated the most promising tech for direct lithium extraction for its operations in Salar de Atacama, Lenny-Pessagno said, but there were several reasons for not moving forward yet.
The technology is energy-intensive and the company didn't have access to 100% renewable power in the region until several months ago. The process also required a lot of fresh water, so the company is working toward using desalinated water instead.
"We need to be perfectly assured that it won't create any unforeseen environmental issues," Lenny-Pessagno said. "We're fully committed to moving forward on direct lithium extraction. But it's going to be a process that takes time."
This article is part of "The Great Transition," a series covering the big changes across industries that are leading to a more sustainable future. For more climate-action news, visit Insider's One Planet hub.
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