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It has been dubbed the new petroleum. Lithium is a hot commodity these days, thanks to the growing demand for lithium-ion batteries in electric vehicles.
But like any hot commodity, it’s a space that could attract bubble chasers – junior exploration companies that may be better at promoting flavour-of-the-month stocks than producing a lithium concentrate pure enough to supply the battery market.
John Burba, president of Colorado-based Ptech Chemical Consulting and a chemist formerly with Dow Chemical Co. (NYSE:DOW), Chevron Corp. (NYSE:CVX) and FMC Lithium, co-developed a process for extracting lithium from brines. He was in Vancouver recently and sat down with Business in Vancouver to talk about lithium.
Q&A
Q: What brings you to Vancouver?
A: Recently some partners and I formed a company called North American Lithium, and we’re really an engineering, development and EPC [engineering, procurement and construction] company. I’m here talking to some folks that are interested in building some lithium extraction plants.
Q: One of the problems for investors is that, unlike most minerals, lithium is not a traded commodity. You can’t look at a chart and see where lithium prices are today. How much is lithium worth and where are prices headed?
A: It’s certainly above $10,000 per metric tonne. That’s for lithium carbonate. I was looking on the internet several weeks ago, and I saw a contract price at $20,000. So it’s up substantially. Lithium carbonate was hovering around $6,500 per tonne three or four years ago, and now it’s arguably between $10,000 and $20,000.
Q: We seem to be in a lithium bubble. What should investors look for in a lithium company to avoid betting on a loser?
A: You really want to see significant lithium concentrations in the brine. And then you need to have a proven process that can pull the lithium out from all the impurities and be able to make a lithium carbonate or hydroxide product that is of high enough quality that you can use it and make lithium-ion batteries.
Q: Lithium can be extracted from the gemstone spodumene, from salars (dried-up, salty lake beds) or from subterranean brines. Can you explain what brines are?
A: Brines are subterranean waters that have, over the years, developed very high concentrations of a variety of different salts. In South America you find a lot of salars – essentially dried-up lakes – that contain a lot of brine that has lithium.… These produce the bulk of the world’s lithium that comes from brine.
Q: It has been said that lithium mining really isn’t mining at all, but an industrial chemical process. So people with experience investing in mineral exploration might be a bit out of their depth when it comes to lithium. What do they need to know?
A: That’s exactly right. The removal of lithium from brine is complicated and difficult. It is a chemical process. You have to have the right kind of brine. Magnesium is a big issue in lithium-contained brines because magnesium interferes with your ability to make pure lithium. So you have to get the magnesium out and you have to get it out early. So these brines, you have to have the right mix.
Q: We are seeing a lot of companies buying up leases for oil and gas field brines in Alberta. What are the challenges of extracting lithium from those brines in a cost-effective way?
A: First of all, you have to have brine that’s clean enough that you’re not fouling up your chemical process. So you have to make sure the oil is out of it. There may be other impurities that need to be removed ahead of the process.
The next thing is you have to have a highly efficient process for recovering the lithium. The problem with lithium is that you have other things that are really [a hindrance] in terms of the chemical manufacturing. Magnesium is a real problem. Boron can be a problem and even calcium can be a problem. But magnesium is one of the biggest. So you have to be able to get a magnesium-free lithium product.
If you want to sell lithium carbonate into the battery industry, you really need to be able to make at least 99% pure lithium carbonate as a finished product. And there are a lot of companies that can’t do that.
Q: B.C. doesn’t have the kind of brine deposits that Alberta has, but it does have untapped geothermal reservoirs. Tell us about the opportunity for co-developing both geothermal energy and lithium production.
A: In some of these geothermal brines, you can reach temperatures as high as 300 C. When you have very elevated temperatures and water in the ground, then the water becomes a very good solvent. So it dissolves rock. You can get very high lithium concentrations in the brines.
If you want to tap these really hot reservoirs, you have to produce steam. And if you’re producing steam, then you can produce electricity … and then you would be taking brine from that and extracting lithium.
The key to these subterranean brines, which can be oilfield brines or geothermal, [is that] if you have the right process, then they can be very environmentally friendly, because … [after you] extract the lithium, the brine goes back into the ground where it started out. You have very minimal waste.
Q: What is the long-term demand for lithium looking like?
A: I think the answer to that is that we’re seeing significant blocks of usage for lithium-ion batteries that are independent of one another that all are showing extremely fast growth. They would be data centre power backup, load levelling and power security for grids and, of course, the electric vehicle. Each one of those is showing curves that are staggering in terms of lithium consumption. So I believe it’s got pretty long legs.”
Ptech Chemical Consulting president John Burba: “if you want to sell lithium carbonate into the battery industry, you really need to be able to make at least 99% pure lithium carbonate as a finished product. And there are a lot of companies that can’t do that” | Submitted
[email protected] @nbennett_biv
Source article: Business In Vancouver
