A California firm’s new technique of cleaner “mining” could provide the electric-vehicle battery industry with all the lithium it needs, in a greener and cleaner way.
Pleasanton-basedSimbol Materials'technology canpull lithium, and other critical metals, out of the effluent water of some geothermal power plants, eliminating the drill-and-blast approach of traditional mining.
“Geothermal power plants provide a quality source of brine,” says Simbol CEO Luka Erceg. “It’s replete and rich with lithium and other metals” like zinc and manganese, he adds.
That's because geothermal powerplants extract hot brine or steam from underground to turn turbines and generate power.
Simbol’s focus will be on the geothermal power plants around the Salton Sea in California’s Imperial Valley.
The economics are compelling, says Erceg, noting that the Salton Sea is capable of supporting 500-600MW of geothermal power generation.
Just one “typical” 50MW plant, he says, creates enough brine to produce 16,000 tons of lithium carbonate — a key form of the element — as well as significant amounts of zinc and manganese.
Market rates for lithium carbonate are currently around $5,500/ton.
The Simbol process leverages a current business to get raw “ore” for almost nothing, something conventional miners pay a fortune to find and exploit.
“We’re at the tail end of their process,” says Simbol’s Erceg. “The last thing I want to do is build a geothermal power plant” just to access the brine, he says.
The power plant owners receive a royalty, he says, adding that geothermal power plant operatorEnergySourceis a Simbol partner.
“It's great for geothermal [power plant] owners whose plants' effluent contains sufficient lithium,” says Garvin Jabusch, chief investment officer at investment firm Green Alpha Advisors. “It means they now have two revenue streams from the same operations — a dream scenario.”
He adds that for geothermal projects with the right geology “this could be a game-changer and allow the net cost of their power to compete with fossil fuels.”
Global demand for lithium is expected to jump to nearly 300,000 tons annually by 2020, according to several clean tech research firms, driven by a need for electric vehicle batteries.
Battery firms likeA123 that produce lithium ion battery for General Motors new Chevy Spark, consume 25 percent of the world’s lithium.
The remaining 75 percent is used by various industries, from pharmaceuticals to ceramics.
Erceg says his goal is to be “among the lowest cost producers” of lithium, which industry estimates put at between $1450-2500/ton.
Like many commodities, the lithium market took a hit after the 2008 recession. The world’s biggest producer, Chile’s SQM, says it sees a glut of lithium until 2020.
But Green Alpha’s Jabusch says the booming worldwide need for lithium-ion rechargeable batteries — for consumer electronics and tools as well as electric and hybrid vehicles — actually points to a current shortage.
“Considering the global economy is experiencing about a 35,000-ton annual lithium shortfall, there will be no problem [for Simbol to] find markets and still get competitive prices,” says Jabusch.
Unlike a typical mining process that produces tailings that require remediation, Erceg says their process actually better prepares the brine for re-injection into the geothermal source, where it would normally be sent anyway.
For power plant operators, a new revenue stream is more good news, considering geothermal energy is already among the cheapest fuel sources.
US Department of Energy figures show that for plants commissioned by 2016, the levelized cost of energy for geothermal is about $102/mwh, compared to $109/mwh for advanced coal-fired plants and $113/mwh for next-generation nuclear power.
But like solar and wind power, while the fuel is effectively free, the upfront capital costs can be high.
Investor presentations at various renewable energy conferences have shown drilling of geothermal wells, each capable of producing around 5MW of power, cost around $10 million, with a 20 percent failure rate.
For Erceg, he says one issue, as with all drilling, is the government permitting process.
“There’s no way to be innovative around those delays,” he says.
But previously tabled legislation in the US Congress could be pointing to coming incentives for domestic production of critical materials, like lithium, in the near future.
That could help more power plants using Simbol’s technology, says Green Alpha’s Jabusch.
Concerns over China’s hoarding of rare earth metals in past years — metals critical to the clean tech industry — led the US Department of Energy to produce a 2011 report identifying critical metals to the US cleantech industry, including lithium.
“I think given the importance of lithium [in] batteries, magnets, turbines, and their importance in the next green economy, that the most key, rarest ones should absolutely be declared 'critical,'” says Jabusch. “Clearly they're already critical to China, which has taken a lead to the tune something like 80 percent of Earth's existing production."
Whatever the demand for lithium and other critical metals, Simbol’s approach is also a sign of a growing movement towards “clean mining” techniques that also improve the miner’s bottom line, says clean tech analyst Dallas Kachan, managing director at research firm Kachan and Co.
“The world has had hundreds of years of dirty mining,” he says. “It’s taking time for new clean technologies that are quietly emerging to prove themselves economically.”
But Kachan, whose firm is spearheading the creation of a new clean mining trade group, adds that advances in energy savings, waste stream reuse and better site reclamation are changing the entire mining industry for the better.
“You’ll soon start to see them reshape the face of mining as we know it today,” he says.
“We need these elements and lots of them,” says Green Alpha’s Jabusch. “To the extent that Simbol or any other enterprise can get them from existing drilling operations, so much the better.”