NEW YORK, Feb. 5, 2019
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NEW YORK, Feb. 5, 2019 /PRNewswire/ -- Conflicting reports regarding Warren Buffett's Berkshire Hathaway's recent alleged interest in new US-based lithium extraction technologies has shone a spotlight on a rising need for innovation. Beyond Buffett's group, there has already been a push from the lithium sector to innovate, from companies including Standard Lithium Ltd. (OTC:STLHF) (TSX-V:SLL), Albemarle Corporation (NYSE:ALB), Livent Corporation (NYSE:LTHM), Sociedad Química y Minera de Chile S.A. (NYSE:SQM), and Nemaska Lithium Inc. (TSX:NMX) (OTC:NMKEF).
Despite lingering doubts about the feasibility of the reported Berkshire Hathaway project to produce lithium from California geothermal wells, another project that's, further along, is priming for lithium production from the US brines. A planned joint venture involving a multi-billion-dollar global specialty chemical company and lithium experts Standard Lithium (TSX.V:SLL) (OTCQX:STLHF) based in Southern Arkansas may have the best chance to succeed.
After the announcement of their latest 802,000 tonnes lithium resource, Standard Lithium (TSX.V:SLL) (OTCQX:STLHF) now has a total combined Southern Arkansas lithium brine resource of 3,888,000 tonnes lithium carbonate equivalent (LCE). To potentially recover all that lithium, the company has developed a proprietary lithium recovery process that eliminates the use of evaporation ponds, cuts processing time down to mere hours, and increases recovery efficiency to a level key to unlocking a huge overlooked lithium resource opportunity in the USA.
"This combined project in Southern Arkansas positions us as the largest lithium brine resource in the US; a significantly expanding market that currently relies on imports of foreign lithium," said Standard Lithium CEO, Robert Mintak.
As international interests such as Germany and China jostle for position in other places like South America, securing North American lithium is highly sought after domestically. The economic impact could be massive, as Chilean exports alone rose to $949 million in 2018.
Utilizing access to extensive infrastructure, low-cost chemical reagents, and a highly skilled workforce, Standard Lithium (TSX.V:SLL) (OTCQX:STLHF) is an example of how one innovative developer plans to fast-track production of a new domestic supply of lithium in the USA.
Domestic Lithium: American-Made
Clarification was needed shortly after the Financial Times cited with people familiar to the project that a Berkshire Hathaway's BHE Renewables subsidiary had signed an agreement to allow extraction of lithium from its California geothermal wells. As well, the report claimed the company was also in talks with Tesla Inc.
Berkshire representatives soon after denied these reports. However, BHE spokeswoman Jessi Strawn followed up with an emailed statement affirming that the company is "evaluating the mineral extraction opportunity in the Imperial Valley" in southern California.
The FT report claimed that the venture could produce 90,000 tonnes per year—Which would technically surpass the annual lithium output from top global producers Albemarle Corporation (NYSE:ALB) and Sociedad Química y Minera de Chile S.A. (NYSE:SQM).
Doubts immediately arose from industry analysts and investors, expressing skepticism that Berkshire could somehow succeed where others have failed. Earlier this decade, Simbol Materials tried to develop a Salton Sea lithium project, only to fail when cash reserves dried up.
Further along in the potential for innovative lithium development is Standard Lithium Ltd. (OTCQX:STLHF) (TSX.V:SLL), whose cutting edge, proprietary lithium extraction and AI driven crystallization technologies are drawing significant attention. Earlier this year, the company produced its first quantity of battery quality (>99.56% purity) lithium carbonate.
While many lithium projects take as long as a decade to reach production, Standard Lithium Ltd. (OTCQX:STLHF) (TSX.V:SLL) has likely shaved months, if not years off of its development time through technology and partnerships. Through its German partners, global chemical giant LANXESS, Standard Lithium has secured access to billions of gallons of lithium-rich brine—produced annually as a by-product of one of the world's largest bromine producers every year at their flagship project in South Arkansas.
Plans for a joint venture are being assembled, as all the ingredients are there. Standard Lithium Ltd. (OTCQX:STLHF) (TSX.V:SLL) has all the infrastructure and investment potential in place to move forward on a massive operating commercial brine-fueled lithium project in the USA. Should the next stages of the pilot and commercial feasibility testing be a success, LANXESS has announced a financial commitment to push the project into production, without Standard Lithium falling into the fundraising issues that typically arise for other lithium producers. The potential for the Southern Arkansas lithium project could become more feasible than any Salton Sea project being talked about today.
Further Global Lithium Developments
As the current undisputed leader in lithium carbonate production Albemarle Corporation (NYSE:ALB) produces most of its lithium from evaporation ponds. Back in November of 2018, the company's claim to have developed a unique process that would more than triple its lithium production from Chile's Atacama desert without using more water drew heavy scrutiny. Details regarding the technology have taken a backseat to other developments in Chile for the company. Just recently, Chile struck a deal with Albemarle to resolve a contract dispute, alleviating the previous threat of an arbitration lawsuit against the US-based producer. Inside the US, Albemarle has already hinted at the potential of producing lithium to business owners near their Magnolia Arkansas operations, near Standard Lithium's potential commercial lithium project.
Former FMC spin-off company Livent Corporation (NYSE:LTHM) has spread itself out across South America and into Australia. The company's Argentina project has been dubbed a "world-class asset", which makes it the one of the industry's lowest-cost producer of both lithium carbonate and lithium chloride.
Second-largest global producer, Sociedad Química y Minera de Chile S.A. (NYSE:SQM) also has an Australia/South America balance. With its Australian partners Kidman Resources, SQM has announced plans for a 45,000 tonnes per year plant at Kwinana to add value to spodumene from its Earl Grey lithium mine. Back in its home country of Chile, SQM received approval from Chile's environmental regulator for a $25 million compliance plan ending a multi-year investigation by authorities that found the company had overdrawn lithium-rich brine from the Atacama salt flat. The plan going forward will require SQM to improve monitoring and reduce some of its extraction of brine. However, the decision is unlikely to have a major impact on SQM's total output of lithium, as the reduction represents only a small percentage of the total authorized to the company by regulators.
Forecasted to likely be North America's next lithium producer, Nemaska Lithium Inc. (TSX:NMX) (OTCQX:NMKEF) is in the construction stage on its Whabouchi mine in the James Bay region of Quebec, Canada. Along with the construction of an electrochemical plant, the company's project at the mine is expected to yield concentrate production in the second half of 2019, followed by lithium salts production about a year later. According to the company's feasibility study, the capex on the project is set at approximately $875 million, which Nemaska has already spent $272.4 million on. In comparison, Standard Lithium's Smackover Project in Arkansas a large amount of the capital investment and infrastructure is in place at the three existing brine processing plants. A decision on the commercial viability of a processing plant in Arkansas should be made by the end of 2020.
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