A Tesla-Backed Startup Wants To Remake Lithium Mining

Aug 15, 2016

Credit www.pureenergyminerals.com

Exploration startups are putting stakes in the ground across Nevada's deserts as lithium prices spike. One company, Pure Energy Minerals, has even inked a deal with Tesla that could potentially provide lithium for their batteries. We spoke with the CEO of Pure Energy Minerals, Patrick Highsmith, about his project and what sets it apart. Below are excerpts of the conversation. It's part of our ongoing series "Behind the Battery Boom."

Q: Tell us a little bit about your company.

Highsmith: We are similar to other small mining companies, except we're exclusively focused on lithium. Our flagship project is Clayton Valley South Project, just outside of Silverpeak, Nevada. [Our project] encompasses a little over 9,000 acres, so it's about maybe six miles north to south and a couple of miles wide. We adjoin the Silverpeak mine, which is the first of the world's lithium brine mines, which went into production in 1966.

Q: Why is Nevada so unique and attractive to exploration geologists right now?

Highsmith: Well lithium is kind of a unique story. The way it's mined, it's the lightest of all metals. It has a number of unique properties. But, of course, most people know it because of its excellent energy density, which means it makes great lightweight batteries.

So the interesting thing about lithium is there are two ways to produce it. About 60 percent of the world's lithium comes from brine deposits. These are literally groundwaters that have lithium dissolved in it, and it can be extracted without digging a hole or what people would typically visualize as a mine.

About 40 percent of lithium, however, does come from hard rock deposits, where its mined, where we dig a hole we crush that rock down and process it. Tends to come at a higher cost because you have to drill and blast hard rock. ...Nevada is one of only a handful places in the world where these brines form, where they're rich enough in lithium to be potentially economic, and where they have formed reservoirs that are big enough to be economic. Really it's Nevada, Chile, Argentina and that's about it.  

Q: So what makes your project different from the existing Silverpeak mine?

Highsmith: The technology we intend to employ to produce lithium, if we're successful, is quite different than that being employed at the Silverpeak mine. That was the first of its kind in the world, and we think the technology has evolved quite a lot since then. So we'll be looking at a very different approach to the extraction... Instead of large evaporation ponds that cover huge areas, or associated dust hazards with that kind of mining... and of course big ponds like that can have an impact on wildlife as well. And then the overarching issue in the Western U.S. is water. And anytime you're pumping a large amount of water — even though in this case it's very salty water and in no way potable — we wanted to look at a new technology there.

So if we're successful [we want to] employ solvent extraction for lithium processing, as opposed to an evaporation-based method. We believe it will have a lower environmental footprint, both in scale and size, and of course we won't have those ponds, as I mentioned. And we also believe we would be a much lower net consumer of groundwater, because we would intend to reinject the groundwater, once the lithium is removed, back into the basin from whence it came.

Q: Talk about supply, do you think demand will eventually outpace supply or is that already happening?

Highsmith: I would say that, at least a lot of literature we see and analysts we talk to, there's a real strain on the supply right now. And the reason is it's fairly difficult and slow to bring a new mine online, and the existing producers have not been successful getting those online.

Therefore, we've seen the price rise. The sort of anecdotal examples of over $20,000 a ton for battery-grade lithium carbonate are all over the Internet. ...So those are very high price spikes, and that's an example of a constrained supply, and we just haven't seen the new mines come online. 

While the dreams of Elon Musk and others are exciting, we feel pressure in the lithium industry to bring new supply online, so that we can see these things become reality. It's kind of an exciting thing to be a part of, but it makes you wonder where are the new discoveries going to happen and when are these new mines going to come online? Because the world's demanding a lot of lithium at the moment.