Ernest Scheyder

(Reuters) – Rio Tinto (NYSE :), General Motors, and the U.S. Energy Department have invested heavily in a variety of technologies that will revolutionize how lithium is made for electric vehicles.

These technologies now need to be proven commercially viable.

Miners can boost global lithium production if they succeed. Their footprint will often be smaller than those of open-pit mines or evaporation lakes, which are typically larger than multiple football pitches and not popular in local communities.

Direct lithium extraction (DLE), is a method that extracts the white metal from brine. It uses membranes and filters to do this. However, they require large amounts of water and electricity. None have ever been successful on a commercial scale.

Investors, global automakers and mining companies are investing millions in DLE businesses, hoping they will supply large quantities of lithium required to fuel the electric car revolution.

It’s a huge game-changer. “There are huge opportunities,” U.S. Secretary of Energy Jennifer Granholm said at an energy conference last month regarding DLE.

Granholm’s Department has awarded Warren Buffett’s Berkshire Hathaway Inc (NYSE:) $15 million grant. This will be used to test DLE technology in California’s Salton Sea. Large geothermal lithium deposits are located under Granholm. It is also considering funding additional DLE projects.

DLE technologies could challenge the traditional miner, such as Albemarle (NYSE 🙂 Corp. The world’s biggest lithium producer and future miners, such as LithiumAmericas (NYSE 🙂 Corp., ioneer Ltd. and Piedmont Lithium Inc.

Albemarle has been studying DLE technology, but executives at the company have stated that DLE works best when it is designed for specific lithium deposits. This could dampen enthusiasm.

It has been questioned why DLE technologies use large amounts of water. General Motors Co (NYSE) relies on the Salton Sea region to provide a large amount of its lithium. It uses 10 tonnes water per tonne.

Lilac Solutions Inc., which is privately owned and supported by Bill Gates’ Breakthrough Energy Ventures (Bill Gates), developed the technology.

Lilac CEO Dave Snydacker said, “If necessary, we are willing to make capital investments to ensure that we don’t jeopardize anyone’s freshwater.” To obtain sufficient lithium for electric cars, society needs new technology.

In February, Hindenburg Research published a report of 59 pages questioning the effectiveness of Standard Lithium Ltd’s DLE technology. This was despite Koch Industries Inc backing it. Lanxess AG (DE:).

Nathan Anderson from Hindenburg said, “DLE has been one of those technologies which’s been hope and a pray, Hail Mary, for most,”

Standard denied the allegations in the report. The report erased Standard’s market value by over $300 million in just one day. It also stoked fear about DLE movements. It has now partially recovered.

I’M A SKEPTIC!

Many DLE-focused companies exist around the world, with some having their own technologies and others using brine-rich acreage. Some have both.

Olivier Le Peuch is the chief executive officer of Schlumberger Inc (NYSE:) Inc., which has been developing DLE technology in conjunction with Panasonic (OTC) Corp. The company hopes to be able to supply Tesla’s Nevada Gigafactory with lithium, but it has also acknowledged that the metal must not be produced without water.

The stakes are high for the United States and international ambitions to become more environmentally friendly. According to the Energy Department, at least 70% of U.S. lithium reserves are in brine reserves. DLE is another option that offers the possibility to make lithium in places where traditional open-pit mines are facing strong resistance.

Vulcan Energy Resources Ltd, Germany, aims at using DLE to produce metal for Renault SA(OTC:), and other automobilemakers in Germany’s Black Forest.

Horst Creuter, Vulcan’s CEO, stated that “as the EV Transition accelerates we can grow along with that market.”

Luna Lithium Ltd is a private company that plans to employ DLE technology in Nevada. Emily Hersh, the CEO of Luna Lithium Ltd said. Compass Minerals International, NYSE:) Inc in Utah’s Great Salt Lake is trying to select a DLE tech for over a year. They hope to finally make a decision by the end of this summer.

Galvanic Energy LLC intends to make a sale of the 100,000-acres it holds in Arkansas, if it discovers a DLE that works.

Wilson (ex-Galvanic geologist, Chesapeake Energy Corp (NYSE):) said, “These companies promote, talk about, but I’m a skeptic till proven otherwise.”

Rio Tinto Ltd spent $825 million on an Argentina DLE Project last December. It stated that it “has the potential for significantly increasing lithium recoveries in comparison to solar evaporation pools.”

Energy Exploration Technologies Inc (formerly EnergyX) is a privately held company that has created a DLE technology. However, EnergyX may need to pair its DLE membrane technology with another DLE technology in certain cases. CEO Teague Egan said.

Our DLE membrane technology works very well, but DLE does not have to refer only to one type of technology. Egan said that this was what many people miss. Egan hopes to have EnergyX available for public consumption by 2023.

EnergyX recently sent to Bolivia a pilot of its technology, in the hope of persuading La Paz to choose EnergyX to help develop Uyuni’s salt flat. This is the biggest lithium deposit anywhere on the planet.

Lilac and several Chinese companies are competing to win the Bolivian project. This is evidence of growing global attention to this industry.

Luna Lithium’s Hersh stated that DLE “is not a magic tool, but it can be a valuable tool for the toolkit.”