CA - Who Is Leading In The Race To Achieve Successful Direct Lithium Extraction (DLE)
2023-04-21 05:08:25 ET
Summary
- A brief reminder about Direct Lithium Extraction (DLE).
- The leading global DLE projects (in order of producing lithium using DLE).
- Risks and further reading.
This article first appeared in 'Trend Investing Group' on March 21, 2023, but has been updated for this article.
We strongly recommend reading our past article on Direct Lithium Extraction ("DLE") to get a basic understanding:
A summary note taken from the above article:
DLE is the latest trend in extracting lithium and it typically competes with the traditional process of using brine ponds and an evaporation process.
DLE will vary from project to project and is already being used successfully in some commercial operations in Argentina and China.
The key advantages of DLE are a dramatically reduced environmental footprint (no need for evaporation ponds), less water usage than evaporation ponds (brine is recycled back to the salar), and dramatically faster lithium production times (from 18 months to < 1 week).
The leading global DLE projects (in order of producing lithium using DLE)
Livent ( LTHM ) - 'Already a DLE lithium producer'
Livent has been using a form of DLE combined with evaporation for decades . They use a type of hybrid system which involves the use of selective adsorption at their Hombre Muerto operation in Argentina.
Jade Cove Partners state :
Different evaporation ponds are used to remove water from the lithium concentrate produced by the DLE process (note: this solution is different from the brine) before the lithium is shipped to Livent's chemical plant at lower elevation for conversion into other lithium chemicals... For over two decades, Livent has been a leader in "the technology behind the technology", and it will be interesting to see how they use this reputation to expand their operations at Hombre Muerto and into other resources.
Livent state :
This process extracts lithium chloride from brine with greater than 95 percent purity. At the same time, it significantly reduces the overall well brine pumping-to-lithium carbonate production time, when compared to conventional solar evaporation methods.
Fastmarkets quote :
According to Livent, using this DLE technology speeds up the lithium concentration process and reduces the need for large pre-concentration evaporation ponds commonly used in conventional brine-based lithium extraction facilities.
Livent is currently expanding their Argentina operations with a target to grow to 45,000tpa by end 2023 and towards 150,000tpa by 2030.
Livent plants to expand from 20,000tpa to 150,000tpa this decade ( source )
Livent company presentation Feb. 2023
Eramet [FR:ERA] ( OTCPK:ERMAY ) ( OTCPK:ERMAF ) - 'Targets DLE production by early 2024'
Eramet is in a JV 'Eramine Sudamerica' (50.1% Eramet, 49.9% Tsingshan) which owns the Centenario-Ratones Lithium Project in Argentina.
The Project plans to use DLE and has already undergone 3 years of extensive successful DLE pilot testing. Eramet state : "A pilot plant was installed in early 2020, providing a real-world demonstration of the quality of the lithium carbonate end product, with a very high level of direct extraction efficiency (90%)." Typically DLE projects get 70-90% efficiency, making Eramet's project in the top tier. Eramet says it takes only 1 week for them to achieve the 90% extraction process, with an over 60% water recycling rate.
The Centenario-Ratones Lithium Project Resource size is an estimated 10 Mt LCE with a 40 year mine life, based on Phase 1 production.
Total Phase 1 CapEx is estimated at US$550m with Tsingshan contributing the first US$400m. Construction is ongoing with first production targeted for early 2024 with Phase 1 planning to ramp to 24,000 tpa LCE by mid-2025. A Phase 2 Feasibility Study will look at an additional 50,000tpa.
The Centenario-Ratones Lithium Project in Argentina ( source video)
Eramet's DLE process ( source )
The Centenario-Ratones Lithium Project Phase 1 highlights ( source )
Eramet company presentation
Eramet's JV lithium project is on track to be the first 'new' global DLE pure play project when it comes online in early 2024.
- Eramet Lithium: a world-class asset (short video)
POSCO Holdings [KRX:005490] ( PKX ) - 'Targets DLE production by H1, 2024'
POSCO has been rather secretive regarding their Argentina lithium project operation. Recall POSCO bought the northern Sal de Vida (Hombre Muerto) tenements from Galaxy Resources (since taken over by Allkem [ASX:AKE] ( OTCPK:OROCF )).
POSCO state :
Construction of the brine lithium plant, which began on the same day, is to be completed in the first half of 2024, with annual production of 25,000 tons of lithium hydroxide. The total investment cost is about 830 million dollars (about KRW 0.95 trillion) including infrastructure investment and operating funds. Operation of the lithium plant and financing will be 100% carried out by POSCO Argentina, a subsidiary of POSCO Holdings. POSCO Group plans to increase mass production to 50,000 tons from the end of 2024 with an additional investment in annual production of 25,000 tons in the second phase of the lithium project, which will begin construction on the same day. Production is expected to be increased by stages to a maximum of 100,000 tons by 2028... by applying the lithium extraction technology POSCO Group has developed independently, the production time was dramatically reduced and yield was improved, leading to global competitiveness in productivity ... POSCO Group plans to become one of the top three global lithium production companies by 2030.
Note: Bold emphasis by the author.
Groundbreaking ceremony to build the lithium plant at Hombre Muerto in March 2022 ( source )
- POSCO unveils $4bn investment plan for lithium project in Argentina
- POSCO Holdings Begins Construction of Saltwater Lithium Plant in Argentina
Standard Lithium [TSXV:SLI] ( SLI ) - 'Possible 2025 DLE producer'
Standard Lithium's flagship projects, the Lanxess Property Project and the South West Arkansas Project, are located in southern Arkansas. Standard Lithium is a DLE focused company and they say that they operate a " first-of-a-kind industrial-scale DLE Demonstration Plant " at the Lanxess Property Project. It has 8,000+ hours testing and proving out the technology.
A DFS is in progress and due for completion in H1, 2023.
At the Lanxess Project, Standard Lithium has a JV to develop a commercial lithium business using DLE from the existing brine resource/bromine operation. More details here or the company presentation here .
Standard Lithium's master plan is to potentially rollout several DLE facilities in future years.
Standard Lithium is 100% focused on DLE solutions with projects in USA ( source )
Vulcan Energy Resources [ASX:VUL] ( OTCPK:VULNF ) - 'Target DLE production by end 2025'
Vulcan plans to use DLE in their geothermal brine project in Germany. First production targeted 2025.Being both an energy project (geothermal energy) and a DLE project the economics are not directly comparable to other straight DLE projects. Nonetheless the project is progressing ahead and looks quite likely to succeed.
In February 2023 Vulcan state :
Lithium extraction Demonstration Plant approval in place and under construction, planned to start up mid-year to train operations team, prior to targeted start of Phase One commercial production17 end-2025.
You can view the Stage 1 Lithium DFS results here and the Company presentation here . You can read more in a Trend Investing article on the geothermal projects here or at Vulcan's website here .
Vulcan Energy's schematic showing planned geothermal power production and DLE lithium production plants in Germany ( source )
E3 Lithium - 'Targets DLE production by 2025/26'
E3 Lithium has developed their own DLE technology with an aim to use it on their flagship Clearwater Project in Alberta, Canada. E3 Lithium has 3 resources across their Alberta Lithium permit area hosted in the Leduc Aquifer (Clearwater, Rocky, Exshaw). E3 has an Inferred Resource of 24.3mt LCE with grades ranging from 52.9 to 75mg/L lithium.
E3 Lithium Direct Lithium Extraction (DLE) technology obtains over 90% recovery and drastically increases the concentration of lithium, while reducing impurities by over 99%.
E3 Lithium state :
E3's DLE ion-exchange technology utilizes a proprietary sorbent designed to be highly selective towards lithium ions. It quickly and efficiently reduces large volumes of low-grade brine into a high-grade lithium concentrate in one step, simultaneously removing nearly all impurities.
The Clearwater Project PEA resulted in a post-tax NPV8% of US$819.9m and 27% IRR, over a 20 year project life. Initial CapEx is estimated at US$602m and OpEx at US$3,656/t.
E3 Lithium plans their Lithium Ion-Exchange (Li-IX) pilot plant to be constructed and operated in the Clearwater Project Area by Q3, 2023 . The Company targets to achieve 20,000tpa+ lithium hydroxide production by 2025-26.
Lake Resources NL [ASX:LKE] [GR:LK1] ( OTCQB:LLKKF ) - 'Possible 2025/26 DLE producer'
Lake Resources is working with Lilac Solutions using lithium ion-exchange DLE at their Kachi Lithium brine project in Argentina. Kachi has a M&I Resource of 2.2 million tonnes Lithium Carbonate Equivalent with 3.1 million tonnes Inferred Resource.
On April 18 Lake Resources announced :
Lake Resources NL (ASX: LKE; OTC: LLKKF) ("LAKE") and its direct lithium extraction technology partner, Lilac Solutions ("Lilac"), today announced the production of 2,500kg of lithium carbonate equivalents (LCE) at Project Kachi, a world-class lithium pilot plant located in Argentina. Based on this successful result, Lilac has increased its ownership of the Kachi Project from 10% to 20%.
Lake Resources plan to have a DFS completed by mid 2023 for their Kachi Project based on 50,000tpa lithium carbonate production using DLE.
Lake Resources has a demonstration plant with successfully operated >1,000 hours and 40,000 liters of Lithium Chloride produced and shipped for conversion to Lithium Carbonate ( source )
Sociedad Quimica y Minera S.A. (NYSE: SQM )
SQM is testing various DLE technologies at their Atacama JV in Chile. SQM plans to spend $1.5 billion on DLE and related projects and is working with regulators to get approval.
On September 29, 2022 Chemical and Engineering News stated :
SQM is evaluating several DLE technologies-including solvent extraction, adsorption, ion exchange, and membranes- for what it says will be the world's largest DLE plant, at one of its facilities in Chile. SQM plans to deploy DLE in combination with new equipment that uses energy to actively concentrate brine in an initial step. The company will continue to use the existing passive evaporation process alongside DLE. At a September investor presentation , SQM CEO Ricardo Ramos said DLE requires more freshwater than evaporation ponds do. The company plans to build a desalination plant on the Chilean coast that will replace the freshwater it consumes at its inland lithium operation. SQM expects to spend $1.5 billion on DLE and related projects and is working with regulators to get approval. "It's going to be huge," Ramos said.
SQM plans to move towards using more DLE and less evaporation ponds in Chile ( source )
Others
- China lithium producers from brine using DLE (details here )
- Bolivia has some potential to use DLE to conquer their high magnesium content - Details here and on CATL/Bolivia dealings here .
- Alpha Lithium [NEO exchange :ALLI][GR:2P62] ( OTCPK:APHLF ) - DLE in Argentina.
- Century Lithium Corp. (TSXV:LCE) ( OTCQX:CYDVF ) - A U.S lithium clay developer at their Clayton Valley Lithium Project in Nevada that is testing DLE. Details here .
- Compass Minerals International ( CMP ) - DLE details here .
- Control Thermal Resources (private) - Stage 1 geothermal operation at their Hell's Kitchen Lithium and Power Project (Salton Sea, California) with a targeted 25,000tpa LiOH production to begin in late 2024. Details here .
- Grounded Lithium [TSXV:GRD] ( OTCQB:GRDAF ) - Has the DLE focused Kindersley Lithium Project (Inferred Resource of 4.2mt LCE ) in Southwest Saskatchewan, Canada. Details here .
- Lithium South Development Corp. [TSXV:LIS] ( OTCQB:LISMF ) - Trailing various types of DLE in Argentina.
- Pure Energy Minerals [TSXV:PE] ( OTCQB:PEMIF ) - Planning a DLE pilot plant at their Clayton Valley lithium brine project. Details here .
Risks
- All DLE projects are slightly different as projects are built to match their particular lithium project.
- DLE is a new technology for many companies and startup and scaling problems would seem to be a significant risk. DLE projects can be slow to ramp up and can face technical challenges.
- The usual mining risks ( funding (large initial Project CapEx), exploration, development , permits, production , partner, cost blowouts etc).
- Business risks - Debt, management, liquidity, and currency risk.
- Sovereign risk - Moderate in Argentina and Chile. Low in Germany, USA, and Canada.
- Stock market risks - Dilution, lack of liquidity (best to buy on local exchange), market sentiment.
Further reading
- April 2020 - Jade Cove Partners - From Catamarca to Qinghai: The Commercial Scale Direct Lithium Extraction Operations (very comprehensive and an excellent article)
- Trend Investing - A Look At The Geothermal Lithium Sector And Some Miners
- Direct Lithium Extraction: What Mining Investors Should Know (video)
- May 2022 - Direct lithium extraction: Could direct extraction technologies help secure more sustainable lithium?
Conclusion
DLE is already being used successfully and likely to get a lot more popular this decade.
In many ways DLE has significant advantages over conventional evaporation for brine projects. It can limit the environmental footprint and has greater efficiency (70-90%) at extracting lithium than conventional evaporation ponds (~50%). It is also dramatically faster. The negatives relate to the often higher upfront CapEx and the technology challenges. Surprisingly OpEx is often quoted to be similar to evaporation projects (time will tell on this).
The current leading DLE producers are Livent and a select few Chinese lithium miners in China. They are already successfully producing lithium at scale using DLE.
Starting in 2024 we should start to see several new projects start to emerge that use DLE. The near term DLE producers by targeted production start include: Eramet (early 2024), POSCO Holdings (H1, 2024), and then perhaps Standard Lithium (2025), Vulcan Energy Resources (end 2025), E3 Lithium (2025/26), Lake Resources (2025/26), SQM and a few others.
DLE is already here and more DLE is definitely coming soon. It's just a case of how quickly new projects will be able to commence and then scale up production.
Please read the risks section as DLE is a new technology for many companies and startup and scaling problems would seem to be a significant risk. Funding the high initial project CapEx is another risk.
As usual all comments are welcome.
For further details see:
Who Is Leading In The Race To Achieve Successful Direct Lithium Extraction (DLE)