Lithium Extraction Startup Landscape, role of direct lithium extraction (DLE) in energy transition.
Katherine He, Anil Achyuta from TDK Ventures
Lithium is the lightest solid metal. It is present in the earth’s crust and is abundantly available at concentrations of just a few percent or less. Lithium can be extracted from brines, rocks, or in clays. Lithium is consumed by battery makers as lithium hydroxide or carbonates depending on the type of cathodes.
Where do we find lithium?
Do we have enough Li for satisfying our aggressive electrification plans?
All battery chemistries (NMC, LFP, solid state, silicon anodes, etc.) require lithium as the key element, and lithium demand will increase by 10x by 2040 relative to today. By 2025, the lithium market size is expected to be $26B, growing to $37B by 2027E. However, the industry supply has consistently failed to meet the market need. So, the simple answer is no, and we need more concerted efforts from miners, EV battery makers, OEMs, and even governments.
Who leads Li processing today?
While lithium resources are most abundantly found in Australia and Chile, most of the processing of lithium is done in China. Meanwhile, several smaller companies are lining up lithium-mining projects in the US. For example, on January 31st 2023, General Motors made a whopping $650M into Lithium Americas to commercialize lithium clays found in Nevada’s Thacker Pass resource. GM has also agreed to buy all the lithium from Thacker Pass when it opens in 2026 — roughly 40,000 tons per year.
How did we get to this level of Lithium supply shortage suddenly?
In the past 20–30 years, most of the lithium production was not to provide lithium for EV LIB use, it was to make glass & ceramics, grease, and lubricants. Until the past two years, the demand for lithium is tripled, thanks to rapid global electrification. However, the supply of lithium is lagging, the bottleneck is mainly the speed of lithium extraction. And thus, EV OEMs, miners are all actively developing new lithium projects and embarking on new direct lithium extraction (DLE) solutions.
Enter Direct Lithium Extraction Technologies
DLE is a technology that extracts lithium by selectively removing the lithium compounds from lithium brines or hard rocks that could provide much higher efficiency, much less chemical waste, faster speed, and less land use compared to conventional techniques.
Ion Exchange DLE:
Mechanism: Lithium-ions in the brine water are chemically absorbed into solid ion material and then swapped for another positive ion.
Main advantages:
• High capacity
• High concentration of Li in the strip solution
• Contamination with impurities minimized
Main disadvantages:
• Needs large amounts of base and acid to work, increases OPEX
• Some IEX material are attacked during desorption
• Degrade in acidic conditions
Ion exchange type DLE technologies have a higher OPEX as they need large volumes of chemical reagents like HCl to break the strong bonds to desorb the lithium. In the long run, the strong acids also denature the adsorbents through each wash cycle.
Adsorption:
Mechanism: Lithium Chloride molecules in the brine water are physically adsorbed onto the sorbent and removed with a strip solution.
Main advantages:
• Water is used to recover the lithium chloride
• No reagents required, media may degrade slower
• Works well with heated brines
Main disadvantages:
• Usually requires temperatures > 50°C
• Relatively low capacities 1–4 g/L
• Difficult to prevent contamination with the brine
• Lower eluate LiCl concentration than IEX
• Requires reverse osmosis to recycle water
The adsorption type DLE could avoid reagent that degrade the sorbent, but usually has large fresh-water usage and requires elevated temperature for higher process efficiency. Companies also need to recover and reuse the solvent, which leads to a trade-off in higher capex at scale.
Solvent Extraction and Precipitation
Mechanism: Liquid phase with adsorptive or ion exchange-type properties to remove lithium chloride or lithium-ions from the brine.
Main advantages:
• High concentrations of lithium can be produced in the strip
• Continuous process.
Main disadvantages:
• The organic solvents are environmentally challenging
• Only works with low concentrations of calcium and magnesium
• Fire risks with the high-temperature brines
• Relatively expensive
Solvent extraction has been used for Li concentrations as low as 100ppm. But the process does suffer from high OPEX costs due to solvent usage. Even a 0.01% solvent loss (or 99.9% recovery) at pilot scale can turn into tens of thousands of dollars per day at scale.
Membrane Separation
Mechanism: Membrane technology (nanofiltration and reverse osmosis) for hardness (Mg, Ca) removal and selectively recover lithium.
Main advantages:
• No contact between brine and extractant
• Fewer impurities and continuous
Main disadvantages:
• In their technological infancy
• Fouling
• lack of stability in geothermal brines.
• Needs pretreatment
Usually membrane separation is used for upstream of the DLE or post-DLE polishing of LiCl, but the use of membranes for selective recovery of lithium is rare. Removing lithium from a highly concentrated brine based on membrane pore size selectivity isn’t done much simply because membranes can’t differentiate monovalent sodium ions from lithium ions.
Electrochemical Separation
Mechanism: Uses the electrochemical cell to convert LiCl directly to LiOH or Li2CO3, eliminating the intermediate and calcium hydroxide.
Main advantages:
• Fewer impurities and continuous
• No contact between brine and extractant
Main disadvantages:
• In their technological infancy
• Fouling
• lack of stability in geothermal brines.
• Needs pretreatment
The role of electrolysis is less lithium extraction and more lithium refining. Companies working on electrolysis technologies take in a relatively concentrated (1,000 to 2,000 mg/L) LiCl solution, which might be 70% pure, and clean this up to battery-grade lithium.
Some Key Pain points of Direct Lithium Extraction
While DLE technologies can truly allow faster speed of extraction, with a lower CO2 overall footprint, and less tailings, some key issues with DLE technologies are outlined below.
1) Lithium resources varies with impurities and concentrate, there is no silver bullet DLE solution
Not all lithium is the same. Different resources of lithium require different extraction technologies. Even from one salar, the composition of brine water could change along radius and depth of the resource. It will be arduous to find one DLE technology that could achieve the best unit economics for various lithium resources. From a major miner’s perspective (who usually owns various mining candidate assets), they will need to evaluate and choose different DLE technologies to work on different resources, and many of the trials may fail. Thus, it makes the situation harder for DLE startups to find the right angle to tackle the right resource with the right technology.
2) DLE is yet to be fully deployed or explored in large scale with longer-term validation.
Even though many DLE technologies have already been researched for decades, they have not yet been tested at a large scale and over a long time period. This means that the economics and effectiveness over time are still to be determined. Assuming the projected lithium price will likely go down to ~$20-$30/kg range in coming 10 years, DLE technologies will need to prove their profit margin at a much lower price than the one we are experiencing today. The evaluation of initial Capex and ongoing Capex and Opex is also important. This depends on project and many factors including location, geopolitics, type of resource and DLE process, cost of energy, infrastructure availability, any valuable by-products, geothermal benefits etc.
3) Post-DLE processes are crucial to determine final battery grade LCE quality
After running the DLE process, customers have to undergo multiple steps in concentrating, refining, and conversion processes to finally produce battery grade lithium in most cases. Lithium loss could be up to >10% after DLE in the following concentrating and chemical softening process. Hence, the impurities present in the solutions become extremely important because concentration of other impurities, causes slugging waste worsens the chemical and energy consumption of the entire process. Most unconventional brines have very high concentrations of competing minerals and hardness, pushing over 100,000 mg/L. While companies market their products as high-recovery solutions, a key differentiator is the ability to achieve an optimum ratio of lithium chloride (or sulfate) to total dissolved solids (TDS). Bottom line, building a lithium extraction plant is not just about the DLE technology. Innovations are needed on lithium concentration, refining, and conversion across the value chain.
4) DLE solutions need to be more project-driven with designs to meet local infrastructure
Startups need to consider the local infrastructure readiness level before they embark on scaling up their technology. South American areas like Chile, Argentina, have great resources, but sometimes lack enough water and electricity support for DLE projects. For example, water supply: Lithium is mostly extracted from the driest places in the world so there is often limited freshwater available for new projects. Water recycling is key to minimizing net freshwater consumption by these projects and ensuring that as little additional freshwater is needed from nature as possible. Another important factor is heat or electricity: DLE projects which will require more heat or electricity for a particular location are less likely to be successful than those that consume less since it could take years to build energy infrastructure to reach remote locations. Projects on brownfield sites or in places like North America or Europe where the grid is accessible can take advantage of better infrastructure to move faster.
So which startups are swinging to the fences and who will win?
Simple answer, a lot of them are swinging to the fences, and time will tell who will win.
Now with the fast growing and huge demand of battery grade lithium production, many water- treatment companies have joined the supply by providing desalination and purification technology to be equipped with part of DLE, and post-DLE process. Startups are exploring electrolysis or various membrane technologies to achieve high concentration of lithium with less impurities and could serve as a platform technology to deal with the concentration variation problem, however, it will be hard to capture the entire value in the lithium supply chain. Some startups are truly swinging to the fences like Summit Nanotech and Novalith where they are proposing end-to-end DLE where the final product they output is a battery grade lithium at the lowest CO2 footprint and water consumption, but time will tell whether these technologies truly scale to fruition.
Regardless, we at TDK Ventures believe that with the growth of the EV market, battery supply chain will encounter severe issues, caused by shortage of battery grade raw materials, leading to long lead times. To solve the shortage of battery grade lithium problem, EV OEMs and cell manufacturers are actively partnering to integrate lithium mining business to secure supply chain resiliency. However, partnership and new business in mining won’t fully solve the bottle neck of lithium production shortage, because production time is extremely long (18–24 months), and traditional methods of lithium extraction consume massive amounts of water, and it is hard to deliver the right quality for customer demand and hence, they must resort to DLE technologies. This is where we think that DLE companies with access to excellent quality lithium resources in Australia or Chile with a competitive edge on low CO2 footprint, low water consumption, and best-in-class unit economics to arrive at battery grade (99.5%) lithium, should potentially become the king of the hill.
