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As electric vehicles (EV) adoption continues to rise, demand for lithium — a key ingredient in the rechargeable batteries that power electric cars as well as electronics — is shooting up, and juniors are racing to bring its projects online.
But while most companies developing lithium mines are focused in Chile, Argentina, Bolivia and, to some extent, in Australia, there is one company that has decided to extract the so-called “white petroleum” from a jurisdiction few, if anyone, had paid attention before: Arkansas, USA.
While most companies developing lithium mines are focused in Chile, Argentina, Bolivia and, to some extent, in Australia, Standard Lithium’s flagship project is in Alaska.
Canada’s Standard Lithium (TXS-V:SLL) not only has chosen an unconventional area to mine for lithium, but is also applying a different approach. Rather than trying to bring a deposit from discovery to production, the Vancouver-based firm is skipping the middle man and focusing on brownfields projects.
“We have a very high level of confidence for the commercial success of the proprietary extraction processes we are testing in-house and will soon be deploying at a demonstration scale in Arkansas,” Standard Lithium Chief Executive Officer Robert Mintak tells MINING.com.
The company, Mintak explains, is focused on finding opportunities with the lowest execution risk, where production permits are already in place and the assets have enough resource potential that there is a demonstrable path to commercial production.
Mintak likens his company’s strategy to “Moneyball,” the Michael Lewis book about the Oakland A’s unconventional approach to success in baseball — minimize risk and maximize reward.
Rather than trying to bring a deposit from discovery to production, Standard Lithium is cutting the middle man and targeting brownfields projects.
“As counter-intuitive as it sounds, we are not focused on grade, which is important, but the mining industry is littered with high-grade projects located in remote or poorly serviced jurisdictions, which require huge capital infrastructure investments and can take a decade or longer to build if they ever are,” Mintak says.
Southern Arkansas is home to one of the world’s largest brine resources. For more than 50 years, brine has been commercially processed for the production of bromine. That brine is rich in lithium, but the geography, climate and brine chemistry are not suited for conventional evaporation ponds.
Instead, the location is the best for demonstrating selective lithium extraction from brine using a modern process, Minks says. The challenge in Arkansas is getting a land package of brine leases. Unlike in Western USA, where mineral claims are staked and recorded with the Bureau of Land management (BLM), in Arkansas assets are private property, so leases are negotiated acre by acre.
Over a ten month period, Standard Lithium has already secured agreements for the only large brine leases available on the highly productive region of the “Smackover Formation”, straddling the southern U.S. from Texas to Florida, and which is most concentrated in southern Arkansas.
“We can’t take credit for being the first to try to crack this opportunity. Albemarle, the world’s No. 1 lithium producer, has a large footprint in Southern Arkansas for bromine processing,” Minks says.
With well over 100 companies across the Canadian and Australian markets pursuing lithium projects, and current suppliers such as Chile’s SQM making announcements around ramping up production, supply glut projections — unfortunately — seem reasonable, Mintak says.
Those who predict an oversupply assume mines will be built on time and produce as expected — Mintak.
But the executive says that for those who really understand the lithium industry, new projects and the expansion of existing ones are not a big threat.
“Most projects require significant amounts of capital and construction expertise to succeed (…) analysts who predict an oversupply assume proposed mines will be built on time and produce as expected, but ignores the fact that many will be delayed or not built,” Mintak says.
Standard Lithium is in the final phase of producing several 43-101 resource assessment reports, two of them for Arkansas.
The firm recently announced a binding MoU with global specialty chemical company LANXESS AG , the largest bromine processor in the region. That agreement will also allow the company to build a selective lithium extraction demonstration plant on one of LANXESS’s three production facilities, expected to be commissioned in the first three months of 2019.
Standard Lithium is testing and proving the commercial viability of extraction of lithium from brine, which is produced as part of Lanxess’s bromine extraction business at its three Southern Arkansas facilities. (Image: Lanxess plant, courtesy of Standard Lithium.)
