The new lithium race
Lithium's new wave
By Michelle Ma
As the world leans into electrification, it will need more lithium. A key ingredient in the batteries that power everything from electric vehicles to cell phones, demand is projected to accelerate over the next decade.
To meet it, a new crop of startups are working on novel ways of producing the valuable metal and promising to open untapped lithium sources. They're also battling heavy economic headwinds, pushing their technology forward amid a current market slump.
A worker holds lithium hydroxide. Photographer: Cristobal Olivares/Bloomberg
Direct lithium extraction (DLE) is an innovative approach to recover the material from brine that's found on the Earth's surface or pumped from underground. There are a variety of techniques, ranging from using lithium-attracting beads to using membranes that selectively filter the metal. Although startups have pursued DLE for years, only recently has the tech matured to become potentially competitive with existing lithium extraction methods.
"Right now the technology is on the cusp of commercialization," said Sung Choi, a specialist in metals and mining at BloombergNEF.
Even still, most startups are operating at the lab or pilot level, reflecting the long road ahead to play a meaningful role in the industry. Lithium has traditionally been extracted from brine in open air evaporation ponds or mined directly from rocks. Countries like Argentina and Chile have been lithium-producing powerhouses, responsible for the majority of the lithium imported to the US, because they have more concentrated sources of the metal. (Australia is the world's largest lithium producer.)
While lithium demand is about 1 million tons annually today, BNEF projects that it will reach 3 million by 2030 and over 6 million by 2050 under its economic transition scenario, which assumes no new policies will be implemented to accelerate the clean energy transition. Lithium is currently oversupplied due to, among other things, a slowdown in EV sales, which means there's enough produced via traditional methods to meet demand in the near- to mid-term. But innovation is needed to meet long-term demand driven by the energy transition, Choi said.
Until recently, the majority of DLE techniques have largely relied on solid materials that can attract lithium chloride, which is refined for use in batteries. Those approaches have only been able to recover modest amounts of the metal, and some materials also attracted unwanted substances that have a very similar chemical structure, such as magnesium.
A handful of new startups say they've overcome those technological challenges. While still expensive, the companies think they can compete in the lithium market, since they use less water and fewer resources than traditional production methods and can work with lower-quality brines with less concentrated amounts of lithium. DLE startups think their techniques can open up new markets, diversifying the lithium supply chain.
Lilac Solutions Inc., which has completed four pilots and two demonstration plants, has raised over $300 million to commercialize its DLE technology that relies on ceramic beads to absorb lithium. It's currently working to construct a 5,000-ton plant at Utah's Great Salt Lake, slated to be completed in late 2026. When built, it will be North America's biggest DLE production facility, Sully said.
Aside from the technological challenges, getting DLE off the ground has proven difficult economically. Today, lithium is cheap and widely available, in the wake of a 2023 price crash. At its peak, battery-grade lithium hydroxide reached $80,000 per metric ton before dropping to $14,000 in April 2024 in the US and Europe.
Still, Sully is hopeful that the completion of the Utah plant will instill confidence in DLE. "People are rightly skeptical," he said. "I think there's some hesitation for big companies to just walk in and use our technology without seeing it themselves."
Read the full story, including how other startups are developing DLE technology. For unlimited access to climate and energy news and original data and graphics reporting.
By Michelle Ma
As the world leans into electrification, it will need more lithium. A key ingredient in the batteries that power everything from electric vehicles to cell phones, demand is projected to accelerate over the next decade.
To meet it, a new crop of startups are working on novel ways of producing the valuable metal and promising to open untapped lithium sources. They're also battling heavy economic headwinds, pushing their technology forward amid a current market slump.
A worker holds lithium hydroxide. Photographer: Cristobal Olivares/Bloomberg
Direct lithium extraction (DLE) is an innovative approach to recover the material from brine that's found on the Earth's surface or pumped from underground. There are a variety of techniques, ranging from using lithium-attracting beads to using membranes that selectively filter the metal. Although startups have pursued DLE for years, only recently has the tech matured to become potentially competitive with existing lithium extraction methods.
"Right now the technology is on the cusp of commercialization," said Sung Choi, a specialist in metals and mining at BloombergNEF.
Even still, most startups are operating at the lab or pilot level, reflecting the long road ahead to play a meaningful role in the industry. Lithium has traditionally been extracted from brine in open air evaporation ponds or mined directly from rocks. Countries like Argentina and Chile have been lithium-producing powerhouses, responsible for the majority of the lithium imported to the US, because they have more concentrated sources of the metal. (Australia is the world's largest lithium producer.)
While lithium demand is about 1 million tons annually today, BNEF projects that it will reach 3 million by 2030 and over 6 million by 2050 under its economic transition scenario, which assumes no new policies will be implemented to accelerate the clean energy transition. Lithium is currently oversupplied due to, among other things, a slowdown in EV sales, which means there's enough produced via traditional methods to meet demand in the near- to mid-term. But innovation is needed to meet long-term demand driven by the energy transition, Choi said.
Until recently, the majority of DLE techniques have largely relied on solid materials that can attract lithium chloride, which is refined for use in batteries. Those approaches have only been able to recover modest amounts of the metal, and some materials also attracted unwanted substances that have a very similar chemical structure, such as magnesium.
A handful of new startups say they've overcome those technological challenges. While still expensive, the companies think they can compete in the lithium market, since they use less water and fewer resources than traditional production methods and can work with lower-quality brines with less concentrated amounts of lithium. DLE startups think their techniques can open up new markets, diversifying the lithium supply chain.
Lilac Solutions Inc., which has completed four pilots and two demonstration plants, has raised over $300 million to commercialize its DLE technology that relies on ceramic beads to absorb lithium. It's currently working to construct a 5,000-ton plant at Utah's Great Salt Lake, slated to be completed in late 2026. When built, it will be North America's biggest DLE production facility, Sully said.
Aside from the technological challenges, getting DLE off the ground has proven difficult economically. Today, lithium is cheap and widely available, in the wake of a 2023 price crash. At its peak, battery-grade lithium hydroxide reached $80,000 per metric ton before dropping to $14,000 in April 2024 in the US and Europe.
Still, Sully is hopeful that the completion of the Utah plant will instill confidence in DLE. "People are rightly skeptical," he said. "I think there's some hesitation for big companies to just walk in and use our technology without seeing it themselves."
Read the full story, including how other startups are developing DLE technology. For unlimited access to climate and energy news and original data and graphics reporting.
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