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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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The Next Frontiers In The Lithium Boom

  • Lithium has now established its position as a key part of the energy industry’s future, and the race to secure supplies of this critical metal is heating up.
  • One potential source of new lithium is on the California-Mexico border, with the California Energy Commission believing it could supply 40% of the world’s lithium demand.
  • Meanwhile, in Argentina, the search is underway for new lithium resources as the country attempts to expand the Lithium Triangle and secure its slice of the pie.

Lithium is becoming an increasingly important topic in the oil and gas world as firms realize the importance of lithium-ion batteries in the future of global energy. It will be key to the energy transition, not only for use in batteries for electronic devices but also for electric vehicles (EVs) and to store renewable energy for steady release. So, what are countries around the world doing to fuel lithium production? Automakers globally are driving up demand for lithium as they increase their EV output, with many car manufacturers planning the rollout of several new EV models by 2030. Particularly across Europe where several countries have outlined the ban of the sale of new internal combustion engine cars for the end of the decade, lithium batteries will become a necessity in the future of transport. In fact, the World Bank believes lithium production will need to increase fivefold to meet global needs and climate targets by 2050. 

In the U.S., several energy firms are racing to find new lithium supplies to boost production over the next decade and beyond. At present, the only active lithium mine in the U.S. is the Thacker Pass mine in Nevada, meaning that many companies are trying to find other sources across the country. 

At present, most lithium supplies come from South America and Australia, with the biggest reserves in Chile. The U.S. produces around 2 percent of the world’s lithium and is home to 4 percent of reserves. To find new sources, the U.S. would likely have to carry out open-pit mining operations or brine extraction, which environmentalists worry could cause environmental damage. Although energy firms argue that developing the lithium market would eventually support the phasing out of fossil fuels. 

Related: Oil Product Tankers Outperform Crude Tankers

Now, a possible location for lithium mining has been discovered on the California-Mexico border in the Salton Sea - a landlocked lake that could soon become known as the Lithium Valley. General Motors Co. signed a deal last week with Controlled Thermal Resources (CTR) to produce lithium in the deserted Salton Sea location. The California Energy Commission has been exploring the area since 2019 and believes it could supply around 40 percent of the world’s lithium demand.

The Salton Sea region has been almost abandoned due to contamination of the lake driving tourists away and leaving ghost towns in their wake. These new exploration and production operations could bring jobs back to the region. Responding to environmental concerns, three companies working on the lake are introducing chemical processes that could extract lithium in a more environmentally friendly manner.

At present, there are 11 geothermal plants close to the lake. President and CEO of BHE Renewables, Alicia Knapp, explained "We are already pumping 50,000 gallons of brine per minute across all of our 10 geothermal facilities to the surface… and we're using the steam from that brine to generate clean energy. So, we're really halfway there in that we've got the lithium right here in our hands." EnergySource and CTR are also looking for greener ways to access lithium resources. 

Argentina is seeing similar momentum in its lithium industry as Australian firm Lithium Energy Limited (LEL) and Hanaq Group, with Chinese and Argentinian investment, partner to explore the Olaroz-Cauchari endorheic basin for lithium resources. Argentina is part of the ‘lithium triangle’ along with Bolivia and Chile. Hanaq already operates the Providencia silver mine in the northern Jujuy province of the country, and now wants to explore for other resources that could power the future of energy. 

Once permits are granted, it could bring much-needed jobs to the region. The two groups aim to promote sustainable development in the basin to, hopefully, produce large quantities of lithium in the future for battery production. 

However, not all countries are prepared to share their resources, with Mexican President Andres Manuel Lopez Obrador (AMLO) steadfast in his decision to nationalize Mexico’s energy industry. His political party MORENA recently passed a law nationalizing the country’s lithium reserves, meaning the creation of a state-owned group for their management. 

Unlike Argentina’s brine-based reserves, Mexico’s lithium is clay-based, requiring new technologies to extract lithium at a higher cost. However, without international participation in the extraction of its reserves, mining is seeming increasingly unlikely. Mexico has the potential to play a big part in the future of battery production, particularly due to its strong manufacturing industry, but by nationalizing its energy sector it will not play a major role in providing green energy for the global transition.  

New discoveries in the U.S. provide optimism over the production of lithium in new regions around the world, while the potential for exploration in Argentina will likely expand the South American lithium triangle’s reach further. Although lithium production remains relatively low right now, the industry is seeing substantial investment, which will allow it to grow at a rapid rate over the next decade. Several countries that have the potential to mine lithium must now decide if they want to be part of this production push. 


By Felicity Bradstock for Oilprice.com

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