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Will New Technologies Replace Lithium Brine Solar Evaporation Ponds?
I think it’s a question of when, not if, cutting-edge technologies will replace the need for large new solar evaporation ponds. These ponds, in operation for decades, reportedly have lithium recovery rates of about 40%-60%, so about half of the water pumped in evaporates into thin air (over 12-24 months). Not ideal for local populations in arid climates. I imagine that existing evaporation ponds will probably be allowed to operate for quite some time, but new ponds may not be needed. Why?
There are dozens of lab-scale stage technologies and (far fewer) pilot plants, that claim extracting and/or processing lithium directly from brines without the need for water-intensive, large footprint solar evaporation ponds. Some of the names may be familiar; MGX Minerals, International Battery Metals, Eramet, Lepidico, IBC Advanced Technologies, Tenova Advanced Technologies, POSCO, Lithium Australia, Lilac Solutions. Importantly, these companies’ technologies (some have lithium resources as well) boast stated recoveries (yields) far greater than that of conventional ponds.
Simply put, a better mousetrap is being developed — in fact, multiple mousetraps — that will simplify the lithium brine extraction process, including cutting the time to recover lithium from a year or more to a matter of days.
Make no mistake, this sea change in next decade’s business. As mentioned, the new technologies are mostly at lab-scale, but the writing is on the wall. Even in Chile, host to the largest evaporation ponds on the planet, water challenges have recently been raised in areas where both Albemarle & SQM have their giant ponds.
Again, this sea change won’t happen overnight, but I think it’s the medium-term future of brine extraction due to much higher recoveries, shorter production cycles, and far less wasting of water (much of the water used in the technologies can be recycled). Once a successful operation or two or three is up and running, every local community will want to pursue these methodologies.
Astute readers have probably been hearing about some of these companies for years, but as far as I know, there’s still no meaningful accelerated commercial-scale lithium brine extraction/processing taking place. So, it’s certainly possible that no approach will prove economically viable anytime soon. However, readers should note that global contract prices of lithium carbonate & hydroxide have roughly tripled over the past 3 years. Rest assured, building that better mousetrap is far more compelling when the size of the prize triples.
Albemarle Corp. Hedging its Bets in Chile?
Recently, Albemarle Corp. announced that it is shifting some focus away from its brine operations in Chile towards a $1 billion hard rock lithium JV with a company named Mineral Resources in Australia. More writing on the wall? — in my opinion, it goes to show that at some point next decade lithium brine production with giant evaporation ponds will no longer be considered the first and/or the best choice. At the very least, Albemarle seems to be hedging its bets on brine with this move. However, make no mistake, it will still be a major producer of lithium carbonate from Chile for years to come.
Lithium players in Chile & Argentina are already looking into these technologies. The race is on.
One of the reasons for this anticipated change is the time it’s taking for new brine sources to come online. Several new projects with PEAs such as Millennial and LSC Lithium forecast a 3-4-5 yr ramp up periods to reach nameplate production in 2023-2025. I feel comfortable saying that not a lot of new lithium carbonate (from new companies using evaporation ponds) will be coming from any junior lithium brine players in Argentina or Chile before 2022-2023. That’s 4-5 years away, plenty of time for one or more new technologies to prove themselves.
The earlier the stage of a company with brine properties, the more likely it will be to pursue new technology. Why? The newest juniors in the lithium brine world are facing 5 or 6 or 7 years if they pursue conventional ponds. It seems likely to me that one or more new lithium extraction/processing technologies will be ready for prime time faster than that.
Bottom line, one or more technologies will (in my opinion) be faster, cheaper (especially given stronger lithium recoveries), have a much smaller footprint, use far less water and be more environmentally sound than solar evaporation ponds within 3-4 years.
A few years ago, who would have imagined this paradigm shift? But, the world has changed. If one remembers nothing else, remember that contract prices for lithium have tripled since 2015. The writing is on the wall.
Disclosures: I have no prior or existing relationship with any company mentioned in this article. I do not own the shares of any company mentioned.
