VIDEO - International Battery Metals: We’ve Got a Perfect Storm in Lithium

The lithium market is hot and getting hotter, and in the last several years many new faces have joined the industry. But experienced players remain, and some are lending their expertise to new ventures.

Dr. John Burba is one such veteran. Now CEO of International Battery Metals (CSE:IBAT), an advanced technology company focused on lithium brine extraction, he has a long background and extensive knowledge in the industry.

In his opinion, the lithium space is now in a perfect storm. “The demand side is just exploding with electric vehicles, power backup for grid systems and power backup for cloud systems, data systems,” he said, adding, “and the supply side is limited because we have only a few large companies … and really only three resources that are being drawn on.”

With International Battery Metals, Burba is working to develop intellectual property related to lithium extraction from oilfield brines for petrolithium extraction projects. The company bills the process as environmentally friendly, low cost and easy to deploy.

Watch the video above for more of Burba’s thoughts on the lithium market and on the technology being developed by International Battery Metals. You can also read the transcript below.

INN: To start off, could you tell me about your background and experience in the lithium sector?

JB: Certainly. I actually entered the lithium sector immediately after getting my PhD. I joined Dow Chemical in a group that was interested in pulling lithium out of oilfield brines, oddly enough, and that was 1979. We did our first project there, and that’s what I really call our phase-one technology. We ran a pilot plant and then Dow exited that business. Then my next exposure was with FMC (NYSE:FMC), and we applied some dramatically improved technology and actually built a lithium recovery plant in Argentina; that plant has been operating since 1998. And then this version of lithium, we’ve improved the technology even more, so we have what we call our third-generation technology. We have improved the absorbent that picks up the lithium dramatically, and then we have a very, very different way of employing that absorbent that gives us some major advantages, particularly for oilfield applications.

INN: You have an extremely long background in the lithium industry. How do you see the market today? Are investors still interested in lithium or are they moving more toward other battery metals right now?

JB: Lithium is still really, really hot. In my experience — I’ve been in a number of other things, I did a stint with the rare earths — the thing that you have to look at on these is “what is the demand side,” as opposed to the supply side. And in lithium we’ve got a perfect storm because the demand side is just exploding with electric vehicles, power backup for grid systems and power backup for cloud systems, data systems; all three of those are huge demands for lithium-ion batteries. So the demand side is extremely high, and the supply side is limited because we have only a few large companies and they are not gigantic companies — they’re large with respect to lithium — and really only three resources that are being drawn on.

So the industry today is under a lot of stress. These guys are doing the best they can to supply more, but it’s very time consuming, very expensive. That is what is causing this very, very high price situation that is continuing to go up. What we’re doing, our solution, is going to allow us to bring new resources on very rapidly, and I think that that’s going to be very beneficial to the industry.

INN: Interestingly in Q1 we did see some concerns about the lithium supply and demand balance, with some people saying, “no, there’s oversupply.” What are your thoughts on that? 

JB: We could have some temporary oversupply situations in the near term as companies bring on big projects that have been under development. If they come on fast, you could have some easing in the pressure. But I don’t think I’m seeing that. I was looking at lithium pricing yesterday, and lithium carbonate is actually higher than it was at the end of the year. So a lot of it is people are speculating, they don’t know. But the lithium industry as it is with the current suppliers, it’s actually fairly brittle in that there’s not a lot that they can do because their processes are large, very expensive to build and it takes a long time to bring them on.

INN: Supply — let’s talk a little bit more about that. Many market participants say that it’s very difficult to get projects ramped up on time to meet increasing demand. Can you talk a little more about your technology for extraction? You mentioned a few key points that investors probably want to know about. 

JB: First of all, our technology is based on technology that has been commercial for a long time. The original version, as I mentioned earlier, was based on an invention of a friend of mine, Bill Bauman, who is no longer with us unfortunately. Bill and I invented this in 1994. We sold that intellectual property to FMC. I went to work for FMC and designed FMC’s plant, and the first-level design and the engineering guys took it and did the real design work and then they built a plant in Argentina.

That technology has been functioning quite well continuously since 1998, so we’re not starting with something speculative. We’re starting with something that we know works, the core of it works. As I said earlier, what we have done now is we have improved that absorbent so that we have better performance out of the absorbent, and then we drastically changed the way that it’s utilized in the engineering equipment. What that is allowing us to do is to build units that can be rapidly moved into locations in the oil industry, and we can put them — they can be segregated by or separated by long distances. So we may have a unit here, there may be another unit 5 miles from here, another one 15 miles from there.

These units then will turn out the product that can be shipped to a central plant for finishing and then distribution. Because these things are portable, we can pick them up and move them around. That’s the reason I say that we can put these things in location very fast and exploit a good resource very quickly. We’re also going into resources that have already been drilled and have wells that we can draw the brine from, and there are disposal wells.

Another aspect of our technology that I’m very proud of is that we have an incredibly small environmental footprint. If you look at the — you can go on Google Earth and take a look at the Atacama Desert in Chile, and you will see tens of thousands of acres of evaporation ponds, and then a lot of giant piles of salt just laying out in the desert. Then if you go and you look at Greenbushes, which is the largest lithium spodumene mine in the world, that’s in Western Australia; you go and look at that thing, and it’s a massive open pit with rock piles. We don’t have any of that because we take brine that is coming out of the ground, we run it one pass through our process and then it goes right back in the ground. We don’t add anything to it. All we do is pull lithium out. And so we have — we just don’t have a lot of the environmental issues that are inherent in these other processes.

INN: So we’ve got quick deployment, low environmental impact and costs are?

JB: We expect that we’re going to be in the lower tier of the cost structure. I can’t — obviously I can’t give any forward-looking statements on that, and a lot of it is we need to get something out in the field and run it and see what it’s actually going to do under the conditions. But the engineering tells us that we’re going to be substantially lower cost than spodumene. I think we’re going to be in the bottom tier, which is where we really want to be.

INN: We’ve got high lithium prices right now, we’ve got lots of companies in the space, big companies like Tesla interested. Is now still the time for investors to get in?

JB: Oh yeah. This is almost like the wild, wild west. I guess the big question in the space is, “is anything going to come along that will replace lithium and these batteries?” I’ve been in chemistry and in technology development for many decades, trained as a physical chemist, and lithium has fundamental characteristics that other elements in the periodic table don’t have. That says theoretically lithium is going to give the best performance in these batteries. All of these things are driven by performance because you want less weight, more capacity. I don’t think it’s likely that we’re going to see a big replacement of lithium anytime soon. Now, you never say never, but it’s not — I don’t think it’s likely. I think we’re going to be living with lithium for quite some time.

That said, I think that society as a whole, global society, has decided we’re moving electric. And I really believe in the tipping points, and I believe in societal drivers. I think we’ve reached the tipping point. Enough people, enough decision makers — that’s like you and me and what we buy — in the world have decided we’re going electric. And once that happens, there’s no going backwards unless there’s a disaster. I think that is the big drive, and so when you look at the penetration rate of electric vehicles today, it’s trivial. You know, China has got the greatest and it’s still a very small percentage of all the cars. It’s moving, and I think that the demand is just going to be staggering. I think an analogy would be 1920 and with the oil and gas industry. I think that we’re potentially in for a very long run of sustained pricing, good pricing and high demand. That’s my personal perspective on it.

INN: You’ve spoken about your company, the broad picture of what you’re doing — is there anything you can tell investors about what’s coming up next?

JB: We are moving rapidly to get our demonstration unit built. We have several engineering steps that we’re going to go through and … we have a number of key accomplishments that will be coming out. We’ve already got the program designed and we’re kicking that off. As we reach those goals then we will be making announcements accordingly, but we expect to be moving very rapidly toward having a unit in the field and demonstrating that we can successfully extract lithium at high recovery rates. Those will be coming soon. I can’t obviously say exactly when, but that’s the path. In any of these things to do good engineering you break it into pieces. So we have some laboratory work we will be doing and that’s to qualify brines, different resources. We will be making prototypes in small scale and then we’ll make a big unit and we’ll operate it and then move forward.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.