The auto industry is introducing fleets of electric vehicles powered by lithium-ion batteries, and while the U.S. has plenty of lithium locked underground, companies have been slow to invest in mining and extraction.
That’s about change. Lithium operations run by Clean Energy are being built near the Salton Sea in California. Just like California’s 1849 Gold Rush, companies are racing to strike it rich in an area some are now calling Lithium Valley.
Eric Spomer is president and CEO of EnergySource Minerals, a company focused on recovering lithium from geothermal brines in the region.
“When you hear estimates of how big this resource could be, it’s usually measured in tons produced annually. And we’re pretty sure it’s over 300,000 tons a year,” Spammer said. “Right now, that’s more than half of the world’s supply of lithium.”
Energy Source Minerals is moving forward with plans to build a lithium facility, which Spammer said could be ready for commercial use by 2025.
Typically, lithium is either extracted from rock mining operations, or recovered from evaporation ponds. The Energy Source Minerals facility will be the cleanest, most efficient lithium process in the world, Spomer said.
The process developed by the Salton Sea uses brine already brought to the surface by geothermal power plants. Six hundred degree brine rises to the surface from more than a mile below the Earth’s surface. It generates steam, which drives turbines to generate electricity.
In the past, mineral-rich brine was simply returned to Earth. Now EnergySource plans to break ground in the next few months on a clean, billion-dollar facility to extract lithium from the brine before reinjecting it underground.
Estimates of the amount of lithium in the region are staggering. Spomer told 60 Minutes that the region could recover enough metal to support 7.5 million electric vehicles a year, which is half of all car and truck sales in the United States.
Energy Sources is leading the lithium charge by the Salton Sea, but the company isn’t alone. Warren Buffett’s BHE Renewables operates 10 geothermal power plants in the region. Another is on the drawing board by an Australian company, Controlled Thermal Resources. Both ventures are part of the lithium rush.
Down the road from EnergySource’s site, Controlled Thermal Resources continues to fine-tune its process in a test facility. CEO Rod Colwell said the company plans to build a new plant to recover lithium based on what they’ve learned. They have succeeded in extracting lithium in their test facility.
“We know it works,” Colwell said.
The lithium extraction process costs about $4,000 per ton, and currently sells for six times that much.
But as companies stand to benefit from what California Gov. Gavin Newsom believes could make the area the “Saudi Arabia of lithium,” others are asking: Will it work for everyone? Rich lithium resources lie beneath one of the poorest parts of California. The Salton Sea was created when the Colorado River flooded the basin in 1905, but for the past 50 years, the main source of water has been chemical-laden agricultural runoff. It has been the ocean for ages Evaporate and shrink. A once-thriving tourism industry has been replaced by environmental degradation, toxic dust and economic hardship. Unemployment in the region is close to 16%.
The lithium industry could provide better jobs and be a force for good in the region, acknowledged environmentalist Frank Ruiz, local program director for the Audubon Society and commissioner of the Blue Ribbon Commission on Lithium Extraction in California. He said the industrialization of the area must be reconciled with its wildlife and communities.
“We have to learn how to balance the table,” Ruiz said.
That balance will be important in the coming years as demand for electric vehicles continues.
“More than 50% of our lineup and retail sales will be from battery electric vehicles by the end of the decade,” Mark Stewart, head of North American operations at automaker Stellantis, told Bill Whittaker. Stellantis owns some of America’s best-known brands, including Chrysler, Jeep and Ram trucks, and is investing $35 billion in an ambitious transition to making electric cars and trucks.
“We’re reimagining our factories — our assembly plants,” Stewart said. “They are already rolling out our plug-in hybrids – as well as looking at two new battery joint ventures that are now in full construction.”
To that end, Stellantis has committed to buying lithium from regulated thermal resources for 10 years, even though the lithium won’t be commercially available for years. General Motors has also committed to buying lithium from the Salton Sea region.
Electric car prices are falling and are expected to be on par with gas cars in a few years, driven by tax incentives in 2022. Inflation Reduction Act. Tax incentives have been a catalyst for domestic lithium development, EnergySource’s Spammer said. Major investments have been made in the lithium-ion battery supply chain, so that soon lithium will no longer need to be sourced, processed and refined overseas.
“It’s a competitive advantage,” Spomer said. “This is an opportunity for us to be a leader globally. And why not lead?”