Chilean President Gabriel Boric’s plan to nationalize his country’s massive lithium industry highlights new filtration technologies that could revolutionize metal production for electric vehicles.
Boric said last Thursday that a new state-owned corporation would employ direct lithium extraction (DLE) instead of evaporation ponds to reduce the environmental effect of lithium production in a national prime-time address.
While neighboring Bolivia, General Motors Co(GM.N), Rio Tinto Ltd(RIO.AX), and other companies have made DLE bets, Boric’s move represents the biggest vote of confidence in the commercially unproven suite of technologies given plans to deploy it across Chile’s vast lithium reserves, the world’s largest.
“This is the best chance we have at transitioning to a sustainable and developed economy,” said 37-year-old leftist Boric, elected in late 2021.
DLE technologies use filters, membranes, ceramic beads, and other small-warehouse equipment to collect metal from salty brines in Chile’s Atacama Desert and elsewhere.
DLE can potentially increase global lithium production with a footprint far smaller than open-pit mines and evaporation ponds, which are unpopular with local communities.
DLE technologies utilize tons of potable water and electricity. None have commercialized independently. Chile would dominate the global lithium and EV sectors for decades if one or more DLE technologies succeeded.
“The devil is in the details, but it’s a great opportunity for technological innovation of brine processing, either way,” said independent lithium industry consultant Chris Berry of Boric’s plan.
Chile’s two lithium producers, SQM and Albemarle Corp., utilize evaporation ponds. They’re studying DLE but haven’t used it. However, Argentina-based Livent Corp (LTHM.N) uses DLE technology with evaporation ponds.
“Now that regulatory bodies are forcing the issue, it’s only going to speed up the innovation and commercialization,” said Teague Egan, CEO of privately held EnergyX, establishing a DLE test facility in northern Chile and has a GM development project.
Boric and the DLE business want to extract lithium from brine and reinject it underground in a closed-loop method that does not alter water tables.
“Boric recognizes you can’t just evaporate all the water and wreck the geological structures,” said John Burba, CEO of International Battery Metals Ltd. (IBAT.CD), which produces portable DLE plants. Burba helped pioneer one DLE technique in the 1970s.
Lake Resources NL, Vulcan Energy Resources Ltd, Renault SA, and Stellantis NV (STLAM.MI) also sponsor DLE projects.
Lake Resources and Bill Gates’ Lilac Solutions Inc. are deploying DLE technology in Argentina. CEO Dave Snydacker said Lilac would construct a DLE test center in Chile in the coming weeks.
“DLE is great for Chile to expand production in an environmentally friendly and scalable way,” said Snydacker.
In recent years, several famous short sellers have claimed that Lilac and Standard Lithium Ltd (SLI.V) DLE technologies don’t function, which the firms deny.
Despite nationalization, DLE firms see business potential in Chile since Boric’s new state lithium corporation will need technological support.
“Nationalization or not, they’ll require technology,” said Amanda Sanregret of privately held Summit Nanotech Corp., which built a Santiago office and DLE test facility last month.
