DLE technology can overcome challenges in Bolivia, US lithium – EnergyX CEO

➤ The Direct Lithium Extraction technology needed to efficiently pull lithium from brine must be tailored to local brine chemistries.

➤ Bolivia's lithium industry is being held back by the country's political environment.

➤ The technology is playing catch up after interest in lithium suddenly intensified.

Puerto Rico-based Energy Exploration Technologies Inc., known as EnergyX, is developing an end-to-end lithium processing solution for the battery sector, including lithium extraction and refining using Direct Lithium Extraction (DLE). The startup was founded in 2018 and is currently piloting its DLE technology in South America's "lithium triangle," with operations in Bolivia, Chile and Argentina.

EnergyX recently completed a $50 million Series B financing round led by General Motors Ventures LLC and received an investment from a group of Korean investors including Posco Holdings Inc. The company has since opened itself up to retail investors as it develops market demonstration plants in North and South America.

The startup was the only company to successfully deploy DLE technology in Bolivia at a pilot plant during the country's lithium race last year, where companies competed to gain an exploitation contract with Bolivia's state-owned lithium company YLB.

The company was disqualified from the tender after turning in its final report 10 minutes late. The final contract was awarded in January to a consortium that includes Chinese battery giant Contemporary Amperex Technology Co. Ltd. CATL has announced that it will invest $1.4 billion in developing a portion of the country's large reserves. Bolivia later awarded additional contracts to Russian state nuclear firm The State Atomic Energy Corp. ROSATOM and Chinese conglomerate CITIC Guoan Group Corp.

S&P Global Commodity Insights interviewed EnergyX founder and CEO Teague Egan about how the startup's DLE technology differs from others, his thoughts on the North American lithium industry and the company's past operations in Bolivia. The interview has been edited for clarity and brevity.

S&P Global Commodity Insights: Can you describe your DLE technology and its competitive advantages?

Teague Egan: For us, there are really two big competitive advantages that are noteworthy. Number one, there is no one-size-fits-all technology so EnergyX decided that, if we want to become the leaders in [DLE], we need to create a platform of technologies that we can use in combination to treat any brine. And number two, there are many steps in going from a raw brine to a battery-grade lithium material. Other DLE companies are working on one step in an overall flow sheet ... EnergyX took the approach that we want to be able to provide an end-to-end solution for our customers. We are comfortable saying that we will guarantee being the lowest cost solution for any brine.

DLE is a home run on all fronts. It equates to larger volumes of production in terms of increased recovery rates, more efficiency in terms of land footprint and lower costs per ton of lithium.

You were the only company to build a pilot plant in Bolivia, but the country awarded lithium contracts to Chinese and Russian companies. Do you think you were disqualified from the lithium race due to Bolivia's political alliances?

I did turn in the report late. There's no denying that. And they had emphasized that there was a hard deadline, so technically speaking, that's the reason that was given. But do I think that there were other factors at play.

EnergyX was a small startup at the time and a company like CATL is the biggest battery company in the world that could offer billions of dollars. So quite frankly, if I were them, I probably would have chosen the more mature, more economically backed company as well.

What do you think has held back Bolivia's lithium industry?

I think that their politics have held them back. Unfortunately, it's just a very convoluted, charged political landscape. They do have technical challenges, but we have proven that those technical challenges can be overcome.

We are more than happy to reengage with Bolivia. We're moving forward in both Chile and Argentina, building large demonstration plants there for several customers plus our own resources. The main message that I want to convey is that EnergyX is standing by ready if Bolivia seeks our help.

Your company is partially focused on the North American lithium industry. What areas in the US are ripe for DLE implementation?

DLE will be more significant in the US than South America from a regulatory and, more importantly, a viability standpoint.

For instance, the geothermal brines in the Salton Sea in California. ... There is no scenario in the world that they'll ever build large 15-square-mile pond systems. It just won't happen from a practical or regulatory standpoint. So DLE is the only viable method to produce lithium from that source.

Same thing in the Smackover formation in Arkansas and Texas. This is where Exxon just made a big purchase. These are areas ... that are not only rolling hills, but also very heavily forested. So there's no scenario in the world that they will build large evaporation pond systems in that geography.

The third good resource geography in the US is the Great Salt Lake [in Utah]. Of course, there are already big evaporation ponds in that area, but DLE is a better solution from an environmental, economic and efficiency standpoint.

DLE technology has not reached commercial scale outside China. Why do you think the DLE space is slow to develop?

Any large-scale industrial innovation doesn't happen overnight, especially large-scale production facilities that are making 10,000, 20,000 or 50,000 tons per year of material. These are large facilities that are expensive. And if you're going to go spend $500 million building a facility, you need to go through the steps of scaling and validation before you pull the trigger on a large plant.

This [process] really takes years. Let's prove it out in a laboratory. Now let's integrate it into a system on bench scale and, maybe, you have several different sizes of pilots. For a company like us, there's multiple variables. We're trying to raise funding, move our innovation forward, secure sources of the brine to test and pilot, and then you move to demonstration — that's the scale that we're building right now.

And lithium wasn't important five or seven years ago, so nobody was focused on inventing new, larger and more efficient industrial processes because there was no demand.

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