For nearly 150 years, brine from oil and gas drilling has long been considered a nuisance for operators. But the tides are turning thanks to the electric vehicle (EV) revolution, which could transform billions of barrels of salty wastewater into wealth.
As lithium producers grapple with potential shortages due to mine permitting delays and staffing issues, oil and gas heavyweights are diving headfirst into the lithium extraction realm.
Oil and gas titans like Exxon Mobil and Chevron have disclosed pilot projects designed to extract lithium from brine, adding a refreshing revenue stream amidst an energy transition that's beleaguering traditional fossil fuel industries. In July, Exxon Mobil's CEO, Darren Woods, informed investors that the company had been exploring lithium extraction for an extended period.
Meanwhile, Occidental Petroleums subsidiary TerraLithium is pioneering a technique to extricate lithium from brine, not only in new wells but also across oil and gas fields and geothermal power production.
The change in sentiment from oil and gas companies comes at a time when lithium demand is rising at unprecedented rates. According to the International Energy Agency, lithium demand could surge by over 40 times by 2040.
At present, the majority of lithium supply is mined from hard rock deposits and salt flats, however a relatively new method called direct lithium extraction (DLE) could help bridge the supply and demand gap much more efficiently.
Goldman Sachs investment bankers view DLE as a "game-changing technology" that could accelerate lithium extraction and increase recovery rates. This increased efficiency could make lower-concentration lithium resources economically viable, even allowing for lithium extraction from oilfield wastewater.
DLE technology, though in its early stages, is gaining traction with more oil companies supporting its development. Occidental Petroleum is exploring brine-based lithium extraction, while Imperial Oil holds a stake in E3 Lithium Ltd. (TSXV:ETL) (FSE:OW3) (OTCQX:EEMMF), Albertas leading lithium developer and extraction technology innovator.
Direct Lithium Extraction Technology Achieves 94% Recovery Rate
E3 Lithium Ltd. (TSXV:ETL) (FSE:OW3) (OTCQX:EEMMF) is a commercialization company with proprietary DLE technology and a significant resource of 16.0 million tonnes of lithium carbonate equivalent (LCE) in Measured and Indicated categories and 0.9 million tonnes LCE in the Inferred category.
This week, E3 Lithium reached an important milestone in the development of its Direct Lithium Extraction Field Pilot Plant, successfully completing additional tests that resulted in initial lithium recovery of more than 94%, a purity of concentrate over 80%, and an average lithium grade in concentrate of 916.6 mg/L.
E3 Lithium President & CEO Chris Doornbos expressed his enthusiasm about the field pilot plant's operations, stating, "We are thrilled to be able to provide further updates on the operations of the field pilot plant. The plan we put in place to test various operating parameters has proved to be effective thus far. Not only have positive results been produced under several operating conditions, we have also grown our confidence to design the most efficient processes to commercialize our vast resource."
On October 4, E3 Lithium hosted its first-ever Investor Day to highlight the companys ongoing success. Apart from the companys successful pilot plant development, CEO Chris Doornbos also pointed to E3s proven technology and strong ability to raise non-dilutive capital in difficult market conditions.
Just last week, E3 Lithium closed an oversubscribed financing for a total of C$23 million, which will help the company progress commercial development. The provincial and federal government have also invested heavily in the company since 2019 due to the vast potential its technology will bring to Alberta.
According to the Preliminary Economic Assessment (PEA) for E3s Clearwater Lithium Project, the project exhibits impressive financial metrics, including a pre-tax NPV8% of US$1.1 Billion with a 32% IRR, and an after-tax NPV of US$820 Million with a 27% IRR1. E3 Lithium believes it can produce up to 150,000 tonnes of lithium, making it one of the worlds largest lithium producers.
According to Doornbos, the PEA, which was released at the end of 2020, validated the company and its technology, unlocked the door to financing and to the company opening its own facility to demonstrate DLE technology, which is being demonstrated today.
The benefit that we have is that we can do it better, we can do it more sustainably and we can build a world-class industry in the province, Doornbos said.
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Micah Reed is an entrepreneur, editor and businessman. he is born in 1977.
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