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Automakers give lithium from US geothermal brines a shot

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Automakers give lithium from US geothermal brines a shot

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General Motors Co. recently announced plans to invest and collaborate with lithium and renewable energy company Controlled Thermal Resources Ltd. to source battery-grade lithium from geothermal brines in California's Salton Sea, pictured above.
Source: Controlled Thermal Resources Ltd.

Amid the global push to decarbonize, automakers have rushed to secure the lithium needed to make electric vehicle batteries. The potential to sustainably recover the white metal using geothermal resources in the U.S. has caught the interest of a pair of car companies in recent months.

Michigan-based General Motors Co. announced July 2 that it would invest and collaborate with lithium and renewable energy company Controlled Thermal Resources Ltd. to source battery-grade lithium culled from geothermal brines in California's Salton Sea region. Controlled Thermal Resources is headquartered in the U.S. and Australia.

Netherlands-based automaker Stellantis NV followed suit, with a July 8 announcement of the signing of memorandums of understanding with two geothermal brine lithium developers. Stellantis signed the deal with Controlled Thermal Resources and Vulcan Energy Resources Ltd., a mining company headquartered in Australia with operations throughout Europe, Reuters first reported July 9, citing anonymous sources.

But there is still a long way to go before lithium produced sustainably from geothermal brines makes a big dent in battery metal supply chains, according to analysts. Although unlocking lithium from geothermal brines using renewable energy and steam could help reduce carbon emissions from lithium extraction and strengthen U.S. supply chains, producers still face challenges in scaling up the process and making it competitive.

Nevertheless, recovering lithium from geothermal brines by applying direct lithium extraction technologies could be a way for manufacturers to lessen the carbon and water intensity of lithium production.

"Lithium mining is going to be critical to mitigating our greenhouse gas emissions, and we want to responsibly manage the environmental impacts of the lithium production process," Laura Lammers said. Lammers is an assistant professor at the University of California, Berkeley, and a faculty scientist with the Lawrence Berkeley National Laboratory, specializing in environmental geochemistry.

"We don't want to punt that responsibility onto other countries where most lithium production is happening now and where they might have less rigorous environmental practices and regulations than we do here in the U.S.," Lammers said.

Next lithium valley

In addition, there is no shortage of lithium resources located in an area of southern California that many industry and political leaders have started referring to as the country's "lithium valley."

The lithium supply available in California's Salton Sea region is "significant," and development of the resource could help the country build out a sustainable battery metal supply chain, the U.S. National Renewable Energy Laboratory said in a May report.

The country consumed approximately 16,000 tonnes of lithium carbonate equivalent, or LCE, annually between 2015 and 2019, according to the U.S. Geological Survey. If fully developed, the Salton Sea could produce an estimated 600,000 tonnes of LCE per year, the California Energy Commission estimated.

Developers still need to scale up the technologies, but several show promise, according to Michael Whittaker, co-founder and director of the Lithium Resource Research and Innovation Center.

"The basic issue is that there are currently no existing geothermal lithium extraction projects at [commercial] scale," Whittaker said July 14. "It hasn't been done. There still needs to be research and development to actually demonstrate that this can be done at a large scale."

That means a majority of the lithium purchased by manufacturers will be produced using evaporative brine or hard rock operations, at least for the foreseeable future, according to several analysts.

Lithium shortage looms

Yet, with the sheer volume of demand anticipated in the coming decades, manufacturers will likely welcome any new sources of battery-grade lithium to the market, said Alex Grant, an advisor for several lithium projects in development and principal at Jade Cove Partners. Global demand for lithium could increase nearly 90% over the next 20 years if the world achieves the climate targets outlined in the Paris Agreement on climate change, according to the International Energy Agency.

"About 80% of 2030's lithium supply doesn't exist yet," Grant said. "So, the pie is going to grow so large, it doesn't really matter who has what size of a slice. There is undoubtedly going to be a lithium shortage in the 2020s due to constraints in supply."

According to Grant, geothermal lithium projects would probably have to keep the cost of LCE below $6,000 per tonne to maintain cost competitiveness on the global market.

But the interest in geothermal lithium projects from automakers, government officials and investors could give a boost to projects in development, such as Controlled Thermal Resources and others in the region.

"I think that early stage attention and commercial progress of these projects demonstrates the value proposition [of geothermal lithium projects] because it is fundamentally desirable to produce lithium chemicals with a low CO2 and land footprint in places with more water than South America," Grant said.

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Controlled Thermal Resources said its Hell's Kitchen Geothermal Project in the Salton Sea region has a potential capacity of 300,000 tonnes per year of LCE. The company expects to begin producing in 2024 at a rate of about 20,000 tonnes of lithium hydroxide per year. The developer also confirmed it started a drilling program, including additional scale-up verification testing.

"There is an incredible opportunity here for the U.S. to take a real leadership position in the global clean energy and electrification transition," Controlled Thermal Resources CEO Rod Colwell told S&P Global Market Intelligence in a statement.

"With the right collaboration and consolidation of efforts, we can secure a clean, domestic source of lithium while also attracting localized battery manufacture," Colwell said. "By working together, we have the resources, the know-how and the workforce to create the most sustainable lithium battery supply chain in the world today."