Lithium Brine Deposits

Lithium brine deposits have gained more and more interest as of late on the back of a veritable lithium rush in Nevada. Here's a brief overview of the different types of lithium deposits.

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Global lithium reserves are estimated to be 14 million metric tons (MT) and lithium is mined from three types of deposits: brines, pegmatites and sedimentary rocks. Continental brines and pegmatites (or hard-rock ore) are the main sources for commercial lithium production.

According to a 2011 University of Michigan study published in the Journal of Industrial Ecology, “[t]he feasibility of recovering lithium economically from any deposit depends on the size of the deposit, its lithium content (referred to as “grade” for ores and “concentration” for brines), the content of other elements, and the processes that are used to remove the lithium-bearing material from the deposit and extract lithium from it.”

Lithium brine deposits have gained more and more interest as of late on the back of a veritable lithium rush in Nevada, largely driven by Tesla Motors’ (NASDAQ:TSLA) lithium-ion battery gigafactory that’s currently under construction in the state. Nevada is also home to Albemarle’s (NYSE:ALB) silver peak lithium mine, the only producing lithium brine operation in the US.

Examples of other companies advancing lithium brine deposits in Nevada include:

  • Dajin Resources (TSXV:DJI,OTCMKTS:DJIFF), which holds the Teels Marsh and Alkali Lake projects.
  • Pure Energy Minerals (TSXV:PE), which is advancing the Clayton Valley lithium project in Esmerelda County.
  • Lithium X (TSXV:LIX), launched late last year, which holds the Sal de los Angeles project as well as claims in Nevada’s Clayton Valley.

Here’s a brief overview of lithium brine deposits. Stay tuned for our look at the other types of lithium deposits out there as well.

An overview of lithium brine deposits

Generally, lithium extraction from brine sources has proven more economical than production from hard-rock ore. While hard-rock lithium production once dominated the market, the majority of lithium carbonate is now produced from continental brines in Latin America, primarily due to the lower cost of production. That said, Australia was still the world’s largest lithium producer in 2015 in terms of mined production, and most of that came from the Greenbushes hard-rock lithium project.

There are three types of lithium brine deposits; continental, geothermal and oil field. The most common are continental saline desert basins (also known as salt lakes, salt flats or salars). They are located near tertiary or recent volcanoes and are made up of sand, minerals with brine and saline water with high concentrations of dissolved salts. A playa is a type of brine deposit whose surface is composed mostly of silts and clays; they have less salt than a salar.

Lithium brine deposits represent about 66 percent of global lithium resources and are found mainly in the salt flats of Chile, Argentina, China and Tibet.

Continental lithium brine deposits

These are the most common form of lithium-containing brine. The majority of global lithium production comes from continental lithium brine deposits in what is known as the Lithium Triangle — a region of the Andes mountains that includes parts of Argentina, Chile and Bolivia.

The best example is the 3,000-square-kilometer Salar de Atacama in Chile, which contains an average lithium concentration of about 0.14 percent — the highest known — and estimated lithium resources of 6.3 million MT.

Two of the world’s leading lithium producers, Sociedad Quimica y Minera (NYSE:SQM) and Albemarle, operate on the Salar de Atacama. On the junior side of things, Li3 Energy (OTCBB:LIEG) holds the Maricunga project on the Salar de Maricunga in Northern Chile.

FMC (NYSE:FMC) produces lithium carbonate from another world-class lithium brine deposit, Argentina’s Salar del Hombre Muerto. Orocobre (ASX:ORE) is currently ramping up production at its operations on the neighboring Salar de Olaroz. Most recently, the company reported production of 2,332 tonnes of lithium carbonate for Q1 of 2016, in line with its ~2,400 tonne guidance.

Galaxy Resources (ASX:GXY) recently restarted mining activities at its Mt Cattlin hard rock lithium mine in Australia, but it also holds the Sal de Vida project in Northwestern Argentina. The company released a feasibility study for the project in 2013, indicating a US$380 million post tax net present value at a 10 percent discount rate.

Bolivia is home to the world’s largest deposit of lithium, the Salar de Uyuni, which reportedly contains up to 50 to 70 percent of known world reserves. However, the odds of this continental brine seeing commercial production are low for several reasons, including: the fact that Bolivia is keen on keeping its natural resources under state control; the deposit’s higher magnesium to lithium ratios, which are three times as high as those at Atacama and make it more difficult and costly to refine the salt into lithium carbonate; and the fact that the evaporation rate at Uyuni is only 40 percent of that at Atacama, which means that refining would be more time-consuming.

Geothermal brines

Geothermal lithium brine deposits make up 3 percent of known global lithium resources and are comprised of a hot, concentrated saline solution that has circulated through crustal rocks in areas of extremely high heat flow and become enriched with elements such as lithium, boron and potassium. Small quantities of lithium are contained in brines at Wairakei, New Zealand, Reykanes Field in Iceland and El Tatio in Chile.

The Salton Sea in Southern California is the best-known example of a lithium-containing geothermal brine. Simbol Materials, a private California-based company, had plans to produce high-purity lithium carbonate from discharge brine borrowed from geothermal plants operating on the Salton Sea. It would have used a unique reverse osmosis process to eliminate the need for solar evaporation, making operations more timely and cost effective.

For over a year and a half, Simbol proved up the process at its demonstration plant in California, and said in mid-January that it had plans to begin construction of a large-scale plant. However, things came to an abrupt halt when the Desert Sun reported that Simbol had fired 38 workers from its demonstration plant at the start of February 2015.

Oil-field brines

Lithium brine deposits can also be found in some deep oil reservoirs, accounting for 3 percent of known global lithium resources. The Smackover Formation on the US Gulf Coast is believed to hold an estimated 0.75 million MT of lithium resource at an average concentration of about 0.015 percent. North Dakota, Wyoming, Oklahoma, Arkansas and East Texas are home to oil-field brines with concentrations as high as 700 milligrams per liter, according to geologist Keith Evans.

Stay tuned for our follow-up piece on the different types of lithium deposits that are out there, and don’t forget to follow us @INN_Resource for real-time news updates.

 

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company or commodity mentioned in this article.

Editorial Disclosure: Dajin Resources, Nevada Energy Metals and Galaxy Resources are clients of the Investing News Network. This article is not paid for content.

This article was originally published as part of a longer piece on the Investing News Network on October 30 2012.

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Comments
  • Please provide the name of small firm which has no debt and $27M of assets; large deposits of LI, and has a stock price of @.$60, located in the desert near Las Vegas, NV?

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