Ernest Scheyder

CALIPATRIA, Calif. (Reuters). Several stakeholders, including investors, are now embracing environmentally-friendly technologies for lithium production. These could be used to meet up to 25% of global demand for electric car batteries metals by the end of this decade.

Stellantis, Bill Gates’ Breakthrough Energy Ventures, and other investors have signed supply agreements or invested millions with start-ups that are directly extracting lithium (DLE), in the last months to help propel the technology towards commercial production. This is expected to happen within the next one or two years.

DLE technology uses less groundwater and land than traditional methods of processing the white metal, such as hard rock mining or brine evaporation. Analysts in the industry see this as a novel way to supply lithium for the EV sector – if the technology is able to work at a large scale.

“More 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 https://www.reuters.com/business/autos-transportation/bmw-invests-lithium-technology-startup-lilac-solutions-2021-10-06 in DLE tech start-up firm Lilac Solutions Inc.

DLE technologies can be compared to standard household water softeners. They remove any metals from your drinking water.

It can take just a few hours for the metal to be filtered in a warehouse of average size. Traditional evaporation tanks, which can cover hundreds of acres, drain the nearby aquifers permanently, and produce lithium over several years, are much smaller.

DLE technology is more costly than those used by evaporation pools, as they require sunlight. Some also need large amounts of freshwater or electricity.

Albemarle (NYSE:) Corp says they’ve studied DLE technologies, but they don’t believe that they will be mainstreamed until late in the decade because of concerns over high energy consumption and water usage.

John Peichel, Suez PA’s water technology department that sells equipment for the lithium industry, stated “Access to clean drinking water is one key obstacle to DLE.”

Schlumberger is well-known for hydraulic fracturing and is currently building a DLE plant in Nevada. It says that its ultimate goal is to make lithium without using any freshwater. The U.S. Department of Energy supports this goal with a contest worth $4 million for best geothermal technology developments.

WALL ST.

Wall Street has not been discouraged by the potential obstacles to green lithium.

Standard Lithium Ltd. shares rose sixfold in value since July when they began trading in New York, though its DLE technology remains being used in Arkansas.

Australia’s Vulcan Energy Resources Ltd shares are up 40% since August on its plans to supply automakers https://www.reuters.com/business/autos-transportation/renault-locks-lithium-supply-vulcan-energy-five-year-deal-2021-08-02 Stellantis and Renault SA (OTC:) from its German DLE project.

Chris Berry is an independent analyst from House Mountain Partners and believes that DLE could provide a quarter global lithium supply based upon existing announcements. However, he pointed out that not all technologies need to be considered equal. Others in the industry have pushed this number even higher.

Last year, the global lithium demand was approximately 320,000 tonnes. By 2025 it is predicted that the number will rise to 1 million tonnes and by 2020 to 3 million tonnes.

Berry explained that DLE technology can be beneficial to investors, but also present challenges when it comes to tailoring technology for each deposit.

California’s Salton Sea is a popular area for DLE development. It lies approximately 160 miles (250.8 km) south of Los Angeles. Under the San Andreas Fault’s San Andreas Fault are superhot brines that are rich in lithium.

Warren Buffett’s Berkshire Hathaway Inc and EnergySource LLC have been looking into ways to incorporate DLE technology into existing power plants to allow them to produce electricity while processing lithium.

Nearby, privately held Controlled Thermal Resources Ltd is developing a geothermal lithium brine project to supply General Motors (NYSE:) https://www.reuters.com/business/autos-transportation/gm-shakes-up-lithium-industry-with-california-geothermal-project-2021-07-02, which said CTR could supply “a sizeable amount of our lithium needs” by 2024.

That project, as well as a similar one in Argentina https://www.reuters.com/business/sustainable-business/australias-lake-resources-teams-up-with-clean-tech-firm-lilac-develop-argentina-2021-09-21, are backed by technology from Lilac Solutions and seen by some analysts as one of DLE’s first commercial tests.

According to Benchmark Mineral Intelligence data, lithium prices are at an all-time high, which is fueling the need for innovative technologies.

Teague Egan is chief executive officer of Energy Exploration Technologies Inc., a private company that works with Argentina’s lithium producer Orocobre.