Summit Nanotech eyes $150m to scale up lithium extraction method

Canada’s Summit Nanotech plans to raise $150 million to take its own direct lithium technology to commercial scale as the startup gears to open a testing facility in Santiago, Chile before year-end.

“We’re already engaging investors and we’re building the data room,” chief executive Amanda Hall told Bloomberg this week on the sidelines of an industry event in Chile. 

Her expectation is that the second round of funding will reflect a valuation of $400 million to $600 million.

The Calgary-based firm is one of several currently racing to commercialize technology to extract lithium directly from brines. These methods would offer an alternative to hard rock and giant water-intensive evaporation ponds that currently supply the battery metal to the world. 

The new set of technologies, known as direct lithium extraction, or DLE, could lower the costs, reduce time and minimize the environmental impact of extracting the battery metal, particularly in South America, which holds about half of the world’s reserves. 

DLE could also enable new sources of lithium in North America, such as extracting it from the saline water generated by oil drilling.

Summit Nanotech, which already counts BHP as an investor, said it is gearing up to kick off activities at a new testing facility this week and expects to have a demonstration plant in the field by mid-2024. The goal, Hall explained, is to reach commercial scale by the end of 2025.

The privately-owned company’s DLE technology, dubbed denaLi DLE, allows miners to recover significant amounts of water otherwise wasted with traditional methods.

The small amount of water used is re-purposed and recycled back to the beginning of the process for pre-treatment and filtration, the company says.

It would also help shortening lithium production times from 18 months to just one day, according to Summit Nanotech.

Billions of dollars are pouring into DLE – what Goldman Sachs Group calls a “potential game-changing technology”, and which has been compared to what shale did for the oil market.

Some industry experts warn that despite a boom in testing and development, these techniques are relatively unproven at scale and perfecting them may take years.