A Growing Wave of Sustainable Lithium Supply- A-DLE

The next wave of lithium supply is building, and it is cheaper and more sustainable than legacy methods. In a twist, it is also being championed by the Oil and Gas industry.

Adsorption-type Direct Lithium Extraction (A-DLE) was invented in the 1970s, and has been used commercially since 1996. Recently, with the rapid growth of the lithium market and an increasing focus on sustainability of supply and carbon footprint of production for electric vehicles, there has been an exponential increase in the number of adsorption-type DLE projects entering into production, and entering the construction phase.

The process effectively involves deep wells, piping infrastructure and water treatment. Because of the close synergies between the two industries, oil and gas companies have now entered the fray, competing with mining companies to produce the lowest carbon footprint, lowest cost lithium supply for electric vehicles in the world.

Commercial growth: large mining companies are ramping up

In the 1970s, DOW first developed its lithium sorbent for its brine plants in the Smackover region in the US, where DOW operated calcium chloride and bromine production?in the late 1970s through to the 1990s. This was an aluminium hydroxide-based lithium sorbent in an ion exchange resin, and has been the basis for the development of many of such sorbents since then.

Lithium adsorption type Direct Lithium Extraction (DLE) using aluminate sorbents was then commercially adopted by FMC Lithium Division, for its lithium extraction at the Salar Hombre Muertos in 1996. FMC, now Livent, a US-listed company and a global top three lithium producer (market capitalisation US$5 billion), has been operating lithium extraction using lithium adsorption ever since then, meaning that the technology has been in commercial use for over 25 years[1]. The company uses its own aluminate-based adsorbent.

Recently, Livent announced plans to increase capacity to 27,000 tonnes per annum (tpa) of Lithium Carbonate Equivalent (LCE) in 2019. Recently, Livent announced two more phases of expansion of its production using adsorption, the first for two equal phases of 20,000 tonnes, and the second a further 30,000 tonnes. The first phase of expansion is nearing completion, with second phases slated for production start in 2026.

Figure 1: Livent phases of expansion using adsorption-type DLE

[1] Livent_2022_SustainabilityReport_English.pdf

Latterly, as lithium demand started to increase with the increase in electric vehicle battery production during the 2010s, new projects started to be built in Qinghai province in China from around 2018. In total, six projects are referenced as being in production in the region, including Lanke Lithium, Zangge Mining Co. Ltd., Jintai Lithium, Minmetals Salt Lake, and Jwell New Materials. Two more projects are under construction, including by Guoneng Mining and Jinhai Lithium. These projects are mostly supplied with an aluminium hydroxide-based adsorbent by the company Sunresin, which is also Chinese. Sunresin has since started to expand globally, entering into contracts to supply sorbent to new projects in North and South America, and has opened an office in Europe.

In production in China:

• Lanke Lithium/ Qinghai Salt Lake Industry Co Ltd (market capitalisation approx. $15 billion USD) (https://www.seetao.com/details/159795.html ) which is currently producing over 30,000 tonnes per annum LCE, with its parent company planning to build a further 40,000 tonnes per annum LCE of capacity.
• Zangge Mining Co. Ltd – currently producing 10,000 tpa LCE. Zangge has a market capitalisation of around $5 billion USD.
• Jintai Lithium, Minmetals Salt Lake, Jwell New Materials, all producing according to publicly available data.
• Sunresin provides the sorbent for many of the projects in China: https://www.seplite.com/company.html . As of 2022, Sunresin has executed nine commercial DLE contracts globally representing a total capacity of 73,000 tonnes per annum of lithium (https://www.seplite.com/sunresin-s-4000t-a-jintai-salt-lake-lithium-extraction-project-put-into-operation.html ).More are under construction in China, including:
• Guoneng Mining
• Jinhai Lithium

Recently, since 2021, French mining company Eramet (market capitalisation ca. EUR 2.5 billion EUR) has been building an adsorption-type DLE project in Argentina for a 24,000 tpa LCE capacity[2] , using a proprietary alumina-based adsorbent. The first tonnes of production are slated for 2024.

In Europe, dual Australian and Frankfurt-listed Vulcan Energy (market capitalisation ca. A$800m) has been developing its Zero Carbon Lithium? Project on the French-German border since 2018, and is now ready to move into the execution phase, using its own, proprietary aluminium hydroxide-based adsorbent. Vulcan is targeting start of production from the Upper Rhine Valley Brine Field (URVBF) by end of 2025, and ramping up production during 2026, with 24,000 tpa LCE capacity for Phase One of production, and will be supplying the European auto and battery industry, including Stellantis.

Australian company Rio Tinto (market capitalisation ca. A$167 billion) is moving into the construction phase of a lithium adsorption project in Argentina, Rincon, using a proprietary adsorbent, having conducted pilot testwork since acquiring the project in 2022 for US$825m.

International Battery Metals (market capitalisation ca. C$235 million) have built a portable DLE plant capable of producing 5,000 tonnes of lithium per annum.

Dozens of other projects are currently under development in China and the Americas, with most development companies opting to source the adsorbent externally, either from Sun Resin in China, or Axion in Russia. Albemarle, the world’s largest lithium producer, also announced it was moving into the DLE space[3] , starting at its bromine operations in Arkansas.“SQM announced that it plans to spend $1.5 billion on desalination and DLE to improve lithium production in Chile. The project would help increase lithium production capacity by more than 60% from 2021 levels, the company says.”

?

[2] https://www.eramet.com/en/eramine-world-class-lithium-production-project

[3] https://www.mining.com/web/albemarle-jumps-into-global-race-to-reinvent-lithium-production/

Other recent market developments

The Chilean Government announced that it would mandate DLE for new projects, due to its ability to improve the environmental performance of lithium extraction[4] .

Goldman Sachs, a bank, recently published a report on the lithium industry stating a preference of “briners to miners” because of the cost, purity and environmental advantages of sorption-type DLE[5] . ?An excerpt: “the implementation of Direct Lithium Extraction (DLE) technologies has the potential to significantly increase the supply of lithium from brine projects (much like shale did for oil), nearly doubling lithium production on higher recoveries and improving project returns, though with the added bonus of offering ESG/sustainability benefits, while also widening rather than steepening the lithium cost curve.”

Elsewhere, the EV Battery Materials Research group at McKinsey & Co. also published research on the subject, stating "the world needs abundant, low-cost lithium to have an energy transition, and DLE has the potential to meet that goal[6] ,"

Enter the Oil and Gas Industry

The Financial Times recently noted the trend of oil and gas majors starting to invest in DLE, because of the technical and operational similarities between an adsorption-type DLE brine operation, and an integrated energy project[7] .

US-listed ExxonMobil Corp (market capitalisation ca. US$ 431 billion), recently announced the acquisition of an adsorption-type DLE project in the Smackover Formation of Arkansas, which was the original site of development of lithium adsorbents by Dow in the 1970s.

Koch Industries (private, annual revenue ca. US$115 billion), is backing Compass Minerals International (CMP.N) to use adsorption-type DLE to extract lithium from Utah's Great Salt Lake starting in 2025. EnergySource Minerals is planning to build a project in the Salton Sea of California, and Ford has agreed to buy lithium from both projects. Occidental Petroleum Corp (market capitalisation US$57 billion) has also entered the space, having acquired adsorption-type DLE technology.

SLB, the world's largest oilfield services provider (market capitalisation ca. US$82 billion), is expanding into lithium and plans to be operational by early next year using adsorption-type DLE process provided by a company called EnergySource. SLB, previously known as Schlumberger, is building a portable Adsoprtion-type DLE plant in Nevada and is in talks with 10 potential customers, said Gavin Rennick, president of SLB's New Energy division. "The fact that you can have a completely domestic brine resource that is now economic is an enormous driver for DLE," said Rennick[8] . SLB has also entered into a term sheet to provide drilling services to Vulcan Energy, the European adsorption-type DLE VULSORB? technology provider, and Zero Carbon Lithium? Project developer.

[4] 1 https://www.mining.com/web/chilepushes new lithium extraction method in risk to future supply/????

[5] https://www.goldmansachs.com/intelligence/pages/direct-lithium-extraction.html

[6] https://www.mckinsey.com/industries/metals-and-mining/our-insights/lithium-mining-how-new-production-technologies-could-fuel-the-global-ev-revolution

[7] https://www.ft.com/content/7616a9f4-e0db-4d61-b189-9e81ddd8137b

[8] Insight: Inside the race to remake lithium extraction for EV batteries | Reuters

Chevron Corp (market capitalisation ca. US$295 billion) has also just announced it is exploring opportunities to enter the space, noting that “extracting lithium fits with the “core capabilities” of a company like Chevron that has deep experience producing oil and gas”.

How the process works

Adsorption-type Direct Lithium Extraction (AD-DLE) is an increasingly widely used commercial method for extracting lithium chloride ions from brine resources. It was first developed in the 1970s, and commercialised in the 1990s. The process involves passing brine through a column, which is loaded with an adsorbent. The adsorbent itself is a lithium chloride aluminate-based material. ?Driven by the heat and salinity in the brine, the lithium chloride ions preferentially adsorb onto the surface of the sorbent.

Brine naturally has a high salinity – it contains ions of various sizes and electric charges. Water molecules surrounding the ions make up a hydration shell. Small lithium ions require a double hydration shell to stabilise their electric charge in the solution. In brines with high salinity this is not possible due to the competition for water molecules with the other ions. Thus, lithium chloride?‘sinks’ to the surface of the sorbent material.?During loading therefore, lithium chloride is adsorbed on the adsorbent?while all the other ions stay in the brine.

When the loaded adsorbent is washed with water, an excess of free water molecules becomes available to the lithium ions. Formation of a double hydration shell is an energetically favoured process, which drives the desorption of the lithium chloride from the surface of a sorbent material.?This process is called elution and the collected wash water is called the eluate.?Eluate has a high concentration of lithium chloride and low concentration of impurities, enabling conversion to battery-grade lithium hydroxide.

Key input parameters

1. A minimum amount of lithium is required in the brine, otherwise the volumes of liquid required to be processed become too large to be economic. The average lithium concentration in Vulcan’s URVBF brines is 181 mg/l Li.
2. Critically, the process requires sufficient salinity in the brine for the adsorption to work. The salinity of Vulcan’s URVBF brine is 120g/l.
3. Heat is also required, as typically the optimum brine temperature for sorbent operation is between 40-95°C. Vulcan’s URVBF brine is produced at 165°C, and after renewable energy production is around 65°C.
4. A source of fresh water is required, to wash the sorbent and de-sorb the lithium chloride. Vulcan has built recycle streams into its process, so that the water can be used again and again, to reduce net water use to a negligible amount.

Critically, no reagents are required in the process, considerably reducing the greenhouse gas (GHG) emissions footprint of production compared to legacy methods [9] .

?[9] Industry peer data generated from Minviro?Life Cycle Assessment (see Vulcan ASX announcement, 4 August, 2021)

Where lithium adsorption may not be appropriate

Where brines are lithium-rich but insufficiently saline, adsorption does not function, and therefore more novel, unproven methods have been trialled in these situations, such as ion exchange. Where the brine project has no ready source of fresh water or affordable method of heating the brines, it may also be appropriate to novel methods such as ion exchange. However, it should be noted that ion exchange requires large amounts of acid and base to load and unload the lithium, which is costly and commercially unproven.

?Differences with legacy lithium production methods

Legacy methods of lithium production from brines involve the use of evaporation ponds and large quantities of chemical reagents. This creates a high net water consumption and lengthy (18 month) process vulnerable to climate/weather disruption. It also results in a low lithium?recovery, the extent to which depends on the Mg/Li ratio?in the brine. It is a complex process with multiple precipitation steps, involving significant chemical reagent consumption, and therefore large CO2 footprint.

?Differences with novel, non-commercial DLE methods

There has been a spate of government-funded research projects into new types of “DLE”. This gives the mistaken impression that DLE is not proven.

It is the novel DLE methods that are being tested by academic researchers and start-ups that are not proven, such as titanium/manganese-based ion exchange and membranes, not alumina-based lithium adsorption-type DLE, which is commercially proven.

Vulcan supports the idea of R&D into new lithium extraction technologies, but all stakeholders should be aware of the separation between what is a commercially proven technology to extract lithium from brines, and what is R&D.

Summary of Vulcan’s activities to de-risk A-DLE on Upper Rhine Valley Brine Field (URVBF) brine

For each established method of metals extraction such as froth flotation, which has been used commercially in the metals industry for over 100 years, the applicability of the process to each different mineral deposit chemistry must be confirmed in laboratory test work studies, and subsequently engineering parameters must be determined and optimised using pilot or bench-scale processing test work[10] .

Adsorption-type Direct Lithium Extraction is no different, having been used commercially for over 25 years. Each lithium brine project is geochemically different, and therefore the lithium adsorption process must be optimised for each particular lithium deposit chemistry. As with other types of metal extraction processes, this typically takes the form of laboratory tests to confirm viability, followed by piloting to determine and optimise engineering parameters.

An initial, screening phase is carried out to determine if lithium adsorption is appropriate for the brine chemistry. This is mainly linked to the salinity within the brine, in that insufficient salinity renders the method unusable. Furthermore, the brine chemistry must be screened to determine that there is nothing within the brine which would degrade the sorbent. Finally, during the piloting, longer term stability of the sorbent must be observed, as other elements in the brine may contribute to degradation of the sorbent over longer periods of time, and a high annual replacement factor of the sorbent could render the project uneconomical.

In the case of the Upper Rhine Valley Brine Field, Vulcan initially determined through confirmatory laboratory tests that the salinity was sufficient for the adsorption process to work, and that the brine chemistry was amenable to the adsorbents. Vulcan built its own in-house laboratory in Karlsruhe-Durlach to carry out this work. This was consistent with the available data on the brine, which stretches back decades.

Secondly, Vulcan built two pilot plants, and conducted piloting tests with multiple different aluminate-based lithium extraction sorbents from different providers, on “live” brine from Vulcan’s geothermal renewable energy wells and plant. This work confirmed that lithium adsorbents available on the commercial market were applicable to the URVBF brine. In parallel, Vulcan developed its own aluminate-based sorbent, VULSORB?, and tested this sorbent first in the laboratory, and then in Vulcan’s pilot plants. VULSORB demonstrated even better performance, in terms of capacity and durability, than the commercially available sorbents.

In total, Vulcan has carried out 2.5 years of piloting test work, over 1,000s of cycles and 10,000s of operational hours, which has confirmed the applicability of adsorption-type DLE to Vulcan’s URVBF brine, and also confirmed key engineering data used to optimise and complete commercial plant engineering design for the Definitive Feasibility Study and Bridging Phase. Vulcan is now ready to commence the execution and construction phase for its Phase One commercial plant, with a planned capacity of 24,000 tonnes per annum lithium hydroxide. This will position Vulcan as the first producer of domestic lithium chemicals in Europe, and the first carbon neutral lithium producer globally, as part of the growing wave of sustainable A-DLE supply coming to market.

[10] https://www.sgs.com/en-ca/-/media/sgscorp/documents/corporate/brochures/sgs-min-tp2002-04-bench-and-pilot-plant-programs-for-flotation-circuit-design.cdn.en-CA.pdf