As the world undergoes a green transition, we are seeing a rapid rise in demand for metals and minerals, particularly lithium, used for rechargeable batteries. These batteries will be key to the electrification of transportation, as well as for storage in renewable energy operations, to ensure the steady and reliable flow of energy to the grid. At present, China dominates the lithium market, producing around 60% of the world’s supply

However, other powers, such as the South American lithium triangle of Bolivia, Chile and Argentina, are gradually increasing their market share. And, as the U.S. looks to decrease its reliance on foreign powers for its energy supply by boosting national production and developing regional supply chains, the U.S. is expected to rapidly tap into its lithium potential in line with an accelerated green transition. 

U.S. Lithium Supply

Lithium can be used to produce cathode materials for lithium batteries, needed for a range of products, from consumer electronics to electric vehicles (EVs) to grid-scale energy storage systems. However, most lithium production currently takes place outside of the U.S. This means that the country’s battery supply chain is vulnerable, an issue made clear during the supply chain disruptions of the pandemic. But the U.S. does have the potential to develop its domestic production of lithium through geothermal brines.

In November, the Department of Energy (DoE) announced that it would be investing millions in the U.S.’s lithium potential following the release of the Biden administration’s far-reaching Inflation Reduction Act (IRA) last summer. The DoE will provide $12 million in funding to advance the science of safe, cost-efficient lithium extraction and refining from geothermal brines. Geothermal brine is a hot, saline fluid that flows within the Earth’s crust. The brine can be pumped to the Earth’s surface to rotate turbines, which generate electricity using natural heat. 

In optimal conditions, lithium can be extracted from brines, with very little waste and carbon pollution. There is the potential to develop these types of operations in some areas of the U.S., such as California’s Salton Sea, which could provide 600,000 tons of lithium annually.

Community Opposition

Although there is significant potential to develop large areas of untapped lithium resources in the U.S., there is also substantial opposition to lithium mining. At present, the U.S. is home to just one lithium mine, in Nevada, which provides around 1% of the global production. Yet, the states of Nevada, North Carolina, and California together hold an estimated 4% of the world’s lithium reserves. But there are several reasons why the lithium industry faces opposition. Lithium extraction can be an ecologically and culturally destructive process, and communities across the country are standing up against mining project proposals due to either the environmental impact of the developments or the disruption to the area. 

Many worry that developing new mines does not support a green transition, due to its detrimental impact on the environment. Others are concerned about the activities taking away from the livelihoods of ranchers, as the biodiversity of the region is destroyed. In addition, health is a recurring concern, due to the disregard of such issues with previous energy projects across the U.S., and communities want to be reassured that mining operations will not contaminate the water and air of surrounding populations, leading to health issues. 

Tesla Lithium Refinery in Texas

Nonetheless, there has been optimism around the country’s lithium potential in recent months, with the breaking of ground at Elon Musk’s massive Texas lithium refinery in May. Tesla Inc just began construction on a $375-million lithium refinery in Texas that CEO Elon Musk hopes will produce enough of the white gold to manufacture 1 million EVs by 2025, making it the biggest facility in North America. 

The advanced facility will expand the company’s operations beyond EV manufacturing to include lithium refining and processing. The plant is expected to be completed next year, to commence full production around a year after. This will help Tesla to become more competitive in the EV market, as several well-known automakers launch new EV models, with China quickly rising as a major EV producer. To date, Musk has not stated where he will source the raw lithium from.

The Role of Climate-Tech Startups

The rise of thousands of clean energy startups could also be key to tapping into the U.S. lithium market. The energy-technology startup EnergyX aims to reshape the world of electric batteries with a paradigm shift in how the world sources lithium with a unique process for Direct Lithium Extraction (DLE)

Climate-tech startups are rapidly putting Austin, Texas – well known for its oil and gas production – on the map as a renewable energy hub. EnergyX is currently in the piloting and demonstration phase for its DLE extraction plants, having raised over $21 million from 5,000 investors, to carry out research and development in U.S. lithium. And many other energy-tech startups across the country are currently working on developing other lithium projects, largely thanks to funding from the IRA as well as greater investor interest in green energy. 

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