The economic pressure from the Chinese Communist Party has led Western nations to seek ways to reduce their reliance on China for key resources, creating business opportunities for foreign companies. One such company is ElectraLith, a startup based in Australia and backed by the multinational mining and resources group Rio Tinto, which is raising funds to make groundbreaking progress in lithium extraction technology. This advancement aims to lessen global dependency on China for lithium refining.
Currently, China dominates the lithium processing sector. According to the energy research firm Rystad Energy based in Norway, as of 2021, Chinese enterprises controlled 65% of the global lithium processing and refining capacity.
Reported by the Financial Times on August 5th, ElectraLith has successfully produced battery-grade lithium hydroxide from various types of lithium raw materials.
After attracting investments from Rio Tinto Group and the UK’s IP Group, ElectraLith is now seeking to raise $15 million to construct its first facility to further advance the development and commercialization of this technology.
ElectraLith is among the few companies developing Direct Lithium Extraction (DLE) technology.
Lithium is a critical component in electric vehicle batteries and renewable energy storage, essential for energy transition to reduce greenhouse gas emissions. Analyst Hugo Nicolaci from Goldman Sachs indicated in a report last year that while most lithium supply is currently produced in Australia and processed in China, the emergence of new technologies like DLE could alter this situation within the next decade.
Goldman Sachs published an article in June 2023 stating that DLE technology’s transformative impact on lithium extraction is comparable to the shale revolution in the oil industry. DLE technology is projected to significantly increase lithium supply, nearly double production capacity, enhance project returns through a more sustainable process, and have less environmental impact compared to traditional mining methods.
In a departure from its competitors, ElectraLith claims it can extract lithium using a process called DLE-R. According to the company’s website, the cutting-edge DLE-R technology represents a breakthrough in lithium extraction and refining, involving a single, scalable modular step to extract and produce battery-grade lithium hydroxide without requiring water or chemicals, solely relying on renewable energy sources.
The Financial Times quoted ElectraLith CEO Charlie McGill, who stated that the ability to refine lithium into hydroxide could bring significant benefits to countries like the United States and Australia, which are taking steps to reduce reliance on China through key mineral policies.
“Outsourcing the refining process could have a significant impact on the US. We could supply (lithium) salt directly to Tesla and the US government without the need for Chinese involvement,” McGill said.
According to Mike Molinari, Managing Director of IP Group Australia, reducing costs, increasing production, and navigating geopolitics have become decisive factors in the critical mineral industry. Technologies that can address these issues have the potential to succeed, particularly in the lithium market.
“Most of the capacity is in China, which has become an issue,” Molinari noted.
As geopolitical tensions intensify, the United States and its allies continue to seek ways to reduce their reliance on China for critical minerals, fueling competition among Western companies. International Battery Metals Corporation (IBAT) announced on July 11th that they have developed a new lithium filtration technology, namely DLE technology. This breakthrough could lead to a more affordable and expedited supply of electric vehicle battery metals.
IBAT has begun implementing its DLE technology at a lithium mine owned by US Magnesium in Utah, aiming to increase annual output to nearly 5,000 tons. IBAT believes this is the start of commercializing DLE production.
The company is competing with Rio Tinto and Standard Lithium to be the first to achieve commercial-scale production of DLE.