Nevada is most recognized as a top tourist destination in North America, and as one of the world’s leading gold and silver producers. However, with the dawn of the electric car revolution and the growing demand for lithium-ion batteries, the state’s unique geology has quickly earned it the distinction of being North America’s primary address for lithium production.
Nevada’s junior lithium explorers are finding that the key to success in the region is not just dependent on scoping out the most prospective claims. As with most desert locales, water is the central challenge. Fortunately, modern technology has the solution.
Nevada’s Lithium Hub is centered in Clayton Valley
Nevada’s lithium activity is at its hottest in the Clayton Valley region— a closed basin playa which hosts numerous active thermal springs along intrabasinal faults giving rise to large lithium brine deposits. The valley is home to Albermarle’s (NYSE:ALB) Silver Peak Mine, North America’s only commercially-producing lithium brine operation, as well as Tesla’s (NASDAQ:TSLA) $5 billion lithium-ion battery gigafactory.
The Nevada-based facility is just one of the 26 such battery cell factories in production or to be in production by 2021, according to Benchmark Mineral Intelligence’s megafactory tracker. These factories are looking to supply batteries for the booming growth in global electric vehicle production. The world’s giant automakers including Ford, Volkswagen and Toyota are planning to roll out millions of electrified vehicles in the coming years. By 2050 Morgan Stanley (NYSE:MS) expects that electrical vehicles will account for a base case of 47 percent of total global car sales which are estimated to reach 130 million units that year.
The increasing growth in demand for lithium and the production dominance of South America’s Lithium Triangle has fueled one of the largest staking rushes and a wave of project acquisitions in Nevada’s recent history. Investing News Network recently reported on the growing list of exploration companies with projects in the region.
Lithium brine processing unsurprisingly water intensive
Whether it’s from the lithium-rich playa basins of Argentina, Brazil, Chile or those of Nevada, the traditional lithium extraction process involves pumping up brine via wells drilled into underground aquifers and then feeding that mineralized water into large ponds to undergo solar evaporation which can take as long as 18 to 24 months. These evaporation ponds cost a lot to build and maintain, and the evaporation process itself can be severely impacted by precipitation and other weather occurrences, further impacting costs and delaying production.
When the lithium in the ponds reaches the optimal concentration, the solution is then pumped to a recovery plant where lithium can be extracted and unwanted minerals such as magnesium can be filtered out. Sodium carbonate is added to the solution to produce lithium carbonate for the battery industry.
Besides the long evaporation time and the high production costs, another critical challenge associated with the traditional lithium extraction process is the significant impact on a region’s water resources. Another factor is the increased risk of land subsidence—the lowering of the land surface elevation following the subsurface movement of earth materials including water.
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Water rights essential for lithium exploration in Nevada—for now
Given the risk of sudden sinkholes that can irrevocably damage centuries old aquifer systems and the one-way movement of precious water supplies in a desert environment like Nevada, it’s no wonder that water allocation in the state is such a contentious issue. A proposed bill is currently under consideration at the state legislature that would protect groundwater and geothermal resources, while also allowing for limited water access for exploration companies.
Citing the need for transparency in the current permitting process, Dave Shaddrick, President of the Nevada Mineral Exploration Coalition, has called the bill a “very good solution to that problem.” Albemarle, which has the senior water rights in Clayton Valley and is the largest consumer of water in the area, is opposed to the bill.
Water rights are critical for moving forward on any exploration or development lithium project in Nevada and companies are increasingly vying for permits. To overcome this obstacle, new technologies that use less groundwater and can safely return water back into the reservoir are now under development.
Water technologies may provide solutions
The booming growth in the lithium-ion battery sector coupled with the major obstacle presented by water rights in Nevada’s lithium hub has prompted a number of forward-thinking companies to investigate technologies that can cut water use while saving time and money to produce lithium in a cleaner and more sustainable manner.
“Modern technology is revolutionizing lithium production technology and potentially providing a much better way to recover lithium while minimizing the environmental footprint of the lithium brine industry,” said Robert McAllister, President and CEO of Enertopia Corporation (CSE:TOP).
Enertopia has partnered with Genesis Water Technologies, an award-winning global leader in specialized water treatment solutions, to adapt existing mobile water treatment technology for the recovery and production of battery-grade lithium carbonate from brines or synthetic brine. The environmental footprint for the such an operation would only measure the space of four semi-trailers compared to the thousands of acres required in the traditional evaporation process, requiring a much smaller capex.
Enertopia is conducting third-party testing of the scalable technology known as the ENERLET recovery process on several synthetic brines using source lithium rock at its wholly-owned Placer and Lode claims in Clayton Valley. Recent results show that the lithium readily dissolves from the source rock in a matter of a few hours with values averaging 225 parts per million (ppm), which is higher than the current reported producing brines from Silver Peak. Even more significant is the extremely low magnesium content—at only 0.085 ppm in solution. Magnesium is considered a contaminant for battery-grade lithium carbonate production and therefore requires additional process steps and costs to separate.
But perhaps the technology’s most important feature is that it requires no pumping of any groundwater.
Mobile and scalable technology like that being developed by Genesis is transforming the way we source materials such as lithium, with the potential to fast-track projects to production in a year or two rather than multiple years and at a much smaller capex than traditional mining projects. Such capabilities provide a new opportunity for lithium companies, from Nevada’s Clayton Valley to the salars of South America’s Lithium Triangle, to better position themselves for the electric vehicle revolution.