A new technology, Direct Lithium Extraction (DLE), with the potential to break Beijing’s monopoly on the global lithium market, has emerged for directly extracting lithium from brine water.
ExxonMobil, Occidental Petroleum, Equinor, and more than a dozen other companies are currently exploring lithium brine extraction in Arkansas, United States to test this innovative technology.
Compared to traditional extraction methods, DLE is faster and has less environmental impact, making it an ideal path for petroleum companies skilled in drilling, pumping, and fluid handling to diversify their businesses.
Supporters believe that once DLE is successfully scaled up, it could create a billion-dollar industry in the United States and weaken China’s control over the lithium-ion battery supply chain.
Geologist and co-founder of Standard Lithium, Andy Robinson, stated in an interview with the Financial Times, “The impact of DLE on the U.S. lithium industry and economy could be as significant as the shale gas revolution did for the U.S. oil industry nearly 20 years ago.”
The company is collaborating with Equinor to develop a $1.5 billion lithium project near El Dorado, Arkansas.
Robinson added, “We could create an industry that provides high-paying jobs for decades while ensuring the supply of critical battery metals in the United States.”
This emerging industry has attracted strong support, including from President Trump, who has been advocating for prioritizing domestic production of critical minerals in the U.S. Last month, the Trump administration approved Standard Lithium’s demonstration lithium plant project as one of the ten key mineral projects eligible for expedited permitting, previously receiving $225 million in funding from the previous administration.
Currently, the global lithium market is highly politicized, with Beijing orchestrating the advancement of lithium mining, refining, and processing over the past decade to propel its electric vehicle industry to global leadership, raising concerns among Western governments.
In the lithium market, U.S. producers accuse the Chinese government of deliberately lowering prices through market dumping to hinder new entrants and maintain their dominance. Lithium carbonate prices have dropped by 80% from their peak in November 2022, to around $9,000 per ton. China is the largest source country for lithium processing and battery production.
Moreover, Beijing has taken measures to restrict the export of lithium and other critical mineral resources and technologies, which are crucial for the defense, automotive, and semiconductor industries of various countries.
David Park, CEO of Standard Lithium, told the Financial Times, “While several significant U.S. projects are conducting feasibility and engineering studies and seeking financing, China has begun actively manipulating the lithium market, and this is no coincidence.”
Standard Lithium is adopting DLE filtration technology from U.S. industrial giant Koch Industries, aiming to produce battery-grade lithium carbonate at a cash operating cost of $6,000 per ton.
In the early 1990s, the Japanese technology group Sony commercialized lithium-ion batteries, driving the application of lithium batteries in electric vehicles and other high-tech products, revolutionizing the industry.
According to data from energy research firm Wood Mackenzie, global lithium demand tripled from 2020 to 2024, reaching around 1.2 million tons, with lithium consumption expected to reach 5.8 million tons by 2050.
Over the past decade, Australia and China expanded hard rock mining, while Latin America expanded lithium brine extraction, with these three regions controlling over 80% of global lithium extraction operations.
The development of DLE technology has the potential to change this landscape; it can separate lithium from brine water in a matter of hours, much faster than the 12 to 18 months needed by traditional evaporation pond processes.
According to Wood Mackenzie, DLE has a recovery rate of 70% to 90%, while evaporation ponds have rates of only 40% to 60%, and DLE technology requires less land and water resources.
In 2024, the U.S. Geological Survey found high lithium concentrations (over 400 milligrams per liter) in the brine water of the Smackover formations in Arkansas, Louisiana, Texas, Alabama, Mississippi, and Florida, potentially lowering DLE extraction costs and enhancing the profit potential for U.S. companies.
Just in southern Arkansas, lithium reserves could reach between 5.1 to 19 million tons, and existing oil and chemical infrastructure facilitates direct development.
Federico Gay, an analyst at Benchmark Mineral Intelligence, told the Financial Times, “DLE technology could reshape the global lithium market in the next decade, helping U.S. companies establish a firm footing in the industry.”
However, he also noted that DLE technology must overcome technical, financial, and strategic challenges to achieve large-scale commercialization and compete with existing technologies and lower-cost countries.
According to the Global Energy Policy Center at Columbia University, at least 36 DLE projects are in various stages globally. Among them, China has 13 such projects, while producers in Latin America are shifting towards DLE as evaporative ponds have depleted too much water resources.
In 2023, the world’s second-largest lithium producer, Chile, announced a transition to DLE technology due to environmental reasons. In December, Rio Tinto stated it would invest $2.5 billion to expand its Rincon lithium facility in Argentina using DLE technology.
Politicians and state officials in Arkansas are striving to attract investment, aiming to win the DLE race and create job opportunities. The state is one of the lowest in per capita income in the U.S., at around $58,000.
Local universities and colleges are expanding programs to train technical workers. Angela Meadows, a chemistry lab worker at Standard Lithium’s El Dorado plant, previously a school administrator, decided to participate in related training courses at the age of 48 to transition into a new career.
“When I started the training program… I felt too old to make a change,” she said, “but (after the training) I realized turning a job into a career.”
Last month, the Arkansas legislature passed a law providing tax incentives for lithium producers and battery manufacturers to encourage investment.
Governor of Arkansas and former White House spokesperson for Trump’s first term, Sarah Sanders, stated, “This will help drive companies to continue to invest.”
“Experts predict that Arkansas could supply 15% of the global lithium, which makes us highly competitive and provides an alternative to China,” she added, “This is not only a huge win for our state, but for the entire country.”