DLE Technology Becomes The Prima Dona For Future Lithium Production

Brine extraction is one way of making lithium. (photo: doc. unsplash)

JAKARTA - Automaker, investor, and oilfield giant Schlumberger NV are starting to embrace environmentally friendly technologies to produce lithium that could help meet 25% or more of global demand for metal electric vehicle batteries by the end of the decade.

Stellantis, Breakthrough Energy Ventures Bill Gates, and others have also invested millions of dollars or signed supply agreements with what startups call direct lithium extraction (DLE) in recent months in a bid to push the technology into commercial production, which is expected in the near future, one or two years into the future.

DLE technology uses less soil and groundwater than hard rock mining and brine evaporation ponds, a traditional way of processing white metal. Industry analysts see it as a new way to help ensure lithium supplies for the EV industry if the technology can work at scale.

"Green lithium is the promise of this new technology," said Kasper Sage of BMW i Ventures, BMW's venture capital fund, which this week invested in DLE technology start-up Lilac Solutions Inc.

DLE technology is comparable to ordinary household water softeners, which remove metals from drinking water. The process can take as little as a few hours to sift through metal in an average-sized warehouse. In contrast, traditional evaporation ponds can be hundreds of hectares in size, permanently deplete nearby aquifers and take several years to produce lithium.

However, most DLE technologies are more expensive to operate than evaporation ponds, which use sunlight, and some require large amounts of fresh water and electricity.

Albemarle Corp and other traditional lithium producers say they have studied DLE technologies but feel they will not become mainstream until the end of the decade, given concerns about high energy and water use.

"Access to clean water is one of the main barriers to DLE," said John Peichel of the water technology division of Suez PA, which sells equipment for the lithium industry.

Schlumberger, known for his hydraulic fracturing work, is building a DLE project in Nevada and says his "ultimate goal" is to produce lithium without fresh water. This is a goal supported by the US Department of Energy with a USD 4 million contest for the development of the best geothermal lithium technology.

The potential hurdles have not deterred Wall Street's interest in so-called green lithium. Stock Standard Lithium Ltd. has increased sixfold since it began trading in New York in July, although the company's DLE technology is still being piloted in Arkansas.

Australian shares of Vulcan Energy Resources Ltd are also up 40 percent since August on plans to supply automakers Stellantis and Renault SA from Germany's DLE project.

Chris Berry, an independent industry analyst at House Mountain Partners, said that based on existing announcements, DLE could generate a quarter of the global lithium supply by the end of the decade. But he noted that not all technology should be treated equally. Other industry consultants put the figure even higher.

Global demand for lithium last year was around 320.000 tonnes, and is expected to reach 1 million tonnes by 2025 and 3 million tonnes by the end of the decade.

"Investors need to weigh the benefits of DLE technology against the challenges of adapting the technology for each lithium deposit," said Berry.

One area of interest from DLE developers is the California Salton Sea, approximately 258 km southeast of Los Angeles. Superheated salt water filled with lithium eddies under the area, which sits above the San Andreas Fault.

Warren Buffett's Berkshire Hathaway Inc and EnergySource LLC are studying ways to add DLE technology to existing power plants so they can process lithium while generating electricity.

Nearby, private company Controlled Thermal Resources Ltd is also developing a geothermal lithium brine project to supply General Motors, which says CTR could supply "a sizeable amount of our lithium needs" by 2024.

That project, and a similar project in Argentina, is supported by technology from Lilac Solutions and is seen by some analysts as one of DLE's first commercial trials.

DLE's attention comes as lithium prices near all-time highs, according to data from Benchmark Mineral Intelligence, sparking a race for the new technology.

"Lithium supply is a major bottleneck for electrification and DLE can help increase that supply," said Teague Egan, chief executive of Energy Exploration Technologies Inc, a private company working with Argentine lithium producer Orocobre Ltd.