Demand for critical minerals that enable the energy transition is surging. This is especially true for lithium, an element used to power our electric vehicles (EVs), smartphones, and other battery-powered conveniences.
According to Statista, the lithium demand in 2022 was around 720,000 metric tons. It’s estimated that by 2030, global lithium demand will exceed 3.1 million metric tons of lithium carbonate equivalent (LCE). Boston Consulting Group also estimates that by 2035 the supply-demand gap is expected to rise to at least 1.1 million metric tons.
To meet this growing gap for lithium, there’s a need to both identify and develop new lithium deposits and increase production from existing sources.
However, it’s not that simple.
Lithium projects involve long lead times, technological innovation, significant capital investment, and many operational, environmental, and social risks. To ensure business certainty, reduce project lead times, and maximize efficiency, adopting subsurface knowledge and cleaner practices can bolster the security of supply without compromising sustainability.
The lifecycle of a mineral mining project
When it comes to new deposits, the average mining project from discovery and asset development to final production can take about 8 to 16.5 years, according to the International Energy Agency (IEA).
Normally, lithium is found in brines or hard rock deposits. Most brine projects are located in the lithium-rich brine areas of South America, the so-called lithium triangle in Argentina, Bolivia, and Chile. Since there’s no other place on Earth that has such high-quality lithium brines, the development in most other regions requires new technology, which increases the project's complexity.
The time required to develop lithium—and any mining project, for that matter—is lengthy because the process is complex and includes multiple steps: from mineral discovery and reservoir characterization to permitting, engineering, procurement, and construction.
The typical lifecycle for a lithium brine mining project starts with a team of geologists finding a resource with promising characteristics. This is followed by drilling to validate exploration analysis, confirm lithium concentrations, estimate reserves, and model and simulate asset production. Once the mineral resource is validated to meet economic estimated requirements, the project development commences. It includes numerous engineering phases (from concept to front-end engineering design) to ensure the project is economically feasible and bankable.
If the project is found economical and passes the criteria of the final investment decision, the engineering, procurement, and construction (EPC) commences. Considering that an average EPC project takes at least 3 years, many milestones and capital infusions take place before investors begin to recoup their investment through production, while still bearing the commodity market risks.
Condensing lead times by thoroughly understanding the subsurface
The initial phase of discovery, exploration, and feasibility is all about subsurface understanding. In the most basic subsurface assessment, we must:
- analyze geophysical data to identify the structure and thickness of the brine reservoir
- analyze well log data to understand the types of sediment or rocks and their actual depths compared to geophysical estimates
- derive the porosity and permeability of the rocks from log and geophysical data
- populate the volumetrics using variogram
- plan to re-enter an existing well or drill a new well
- acquire fluid samples for lab analysis to understand the composition of the fluids at each interval
- build a brine concentration model
- integrate all the information above into a 3D static model
- calculate the lithium resource in place.
The methodology outlined above helps us understand the brine’s potential to extract lithium, along with how it may flow through the sediments given the pressure support available. These steps are crucial to understanding whether the critical mineral concentration, process to purify, production volumes, and asset’s life cycle are economically feasible for further investment.
If initial subsurface analysis yields promising results, the next step is to invest in the drilling of additional wells to confirm resource quality and quantity—the extent of the resource—and then update the geological model. Using the static model built in previous steps, we can now embark on dynamic simulation of the brine’s flow with different development concepts over the resource’s lifetime. Where sustainable development practices are planned, this simulation would also include spent brine reinjection, a process that returns the spent brine (without lithium) to the underground aquifer.
Sustainably maximizing the efficiency of battery-grade lithium production
Time is money, and the efficient use of time in production and processing is crucial to profitability. The development of new approaches and technologies for extraction and mineral processing improves economics by:
- increasing recovery through an advanced understanding of brine composition
- optimizing lithium concentration and purity for premium pricing
- accelerating time-to-market through onsite conversion.
Increasing recovery through an advanced understanding of brine composition
Lithium brines vary significantly based on local geology. A brine from Nevada in the United States, for example, is very different than a brine from the Salar de Atacama in Chile. Depending on location, brines may contain high concentrations of ions such as sodium, potassium, calcium, magnesium, borates, sulfates, and more. Each brine is unique and must be analyzed, tested, and treated to determine the feasibility and effort to isolate lithium and optimize it for extraction.
Today, most brines mined in the lithium-rich areas of primarily South America are treated using the conventional solar evaporation process, which normally takes 12 to 18 months and typically recovers only 30% to 50% of the lithium in the brine.
New technologies powered by direct lithium extraction (DLE) and product polishing and concentration technologies recover 85% to 95% of lithium and take only minutes rather than months. This increase in recovery, combined with product-to-market time, allows for an increase in margins and greater pricing flexibility for operators.
Optimizing lithium concentration and purity for premium pricing
Once lithium has been extracted from feed brine, there are critical post-treatment steps to optimize the extracted lithium solution for purification and concentration. These steps ensure the high quality and 99.5% purity of lithium necessary to meet stringent battery-grade specifications. Meeting these specifications allows producers to maximize production and offtake for battery manufacturers and benefit from premium pricing.
Lithium that doesn’t meet the technical specifications for EV batteries is considered technical-grade and sold at a lower price for other uses such as glass, ceramics, and consumer electronics.
After post-treatment, new and highly energy-efficient desalination technologies can remove water from the treated brine to produce a concentrated lithium chloride solution without the use of conventional thermal evaporators, thereby significantly reducing carbon emissions. In combination with DLE technologies, the process promises to deliver technical-grade lithium chloride in hours versus the approximately 1.5 years required of evaporative processes. This innovative approach can help producers meet global demand through faster times-to-market and satisfy stakeholders through faster returns on investment.
Accelerating time-to-market through onsite conversion
China controls almost 60% of the world’s capacity for processing raw lithium products into battery-grade chemicals. Most of the lithium extracted by producing countries, whether from hard rock or brine, is exported to China for processing into battery-grade lithium. According to the IEA, China accounted for over 70% of global EV battery cell production capacity and around 60% of global EV sales in 2022. The country plays a key role in the battery supply chain by exporting both battery-grade lithium carbonate or hydroxide and battery cells, as well as 35% of exported EVs to global markets.
To secure resource access and support new transportation electrification trends, countries are passing legislation to encourage the diversification and protection of critical minerals. In the past few years, the United States passed the Inflation Reduction Act which included provisions for strengthening domestic supply chains and tax credits. The Zimbabwe government passed an export supply ban on lithium. The European Union (EU) also proposed The Net Zero Industry Act, which aims for 90% of battery manufacturing to be accomplished by EU manufacturers. And Chile's President Gabriel Boric said he would nationalize the country's lithium industry—the second largest in the world.
Therefore, the ability to extract, concentrate, and convert lithium chloride (onsite or domestically) to battery-grade lithium carbonate or hydroxide for local or regional delivery to battery manufacturers offers substantial advantages:
- It offers the “localization” of battery supply chains.
- It creates a more sustainable process by minimizing transport-related greenhouse gas emissions.
- It improves time-to-market by eliminating the transport time for conversion.
- It saves transport costs.
- It supports countries’ domestic policies.
Though much needs to be done in terms of developing additional lithium resources and maximizing production from existing operations, the IEA estimates that the world will have a surplus of lithium in the near term. Our current challenge is to improve the economics and time-to-market of new and existing supplies to meet demand through promising new strategies and technologies.
