What kind of technology is geothermal lithium extraction that Warren Buffett is looking at?

Interface News Reporter | Wang Yong

After the competition for lithium mines and salt lake resources has been basically determined, some companies have set their sights on underground brine.

Mike Wirth, CEO of U.S. oil giant Chevron, said in an interview, "We are looking for opportunities to produce lithium metal for electric vehicle batteries," Bloomberg reported on July 24. ”

Mr Voss said as an experienced oil and gas producer, lithium extraction is in line with its "core competencies". But he did not disclose specific plans.

On the same day, the U.S. Department of Energy announced $10.9 million for 10 projects in nine states that will advance innovative technologies to extract and convert battery-grade lithium from geothermal brine in the United States.

Alejandro Moreno, Acting Assistant Secretary of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE), said, "A strong domestic lithium supply chain is critical to the U.S. clean energy economy. This investment will support innovation to safely and sustainably produce the lithium needed for EV batteries and the domestic grid. ”

According to the DOE, this work will give the U.S. greater access to cost-effective domestic sources to meet the Biden-Harris administration's goal of 50% electric vehicle penetration by 2030 and a net-zero economy by 2050.

The projects are co-led by EERE, the Office of Advanced Materials and Manufacturing Technologies (AMMTO) and the Office of Geothermal Technology (GTO).

Among the nine projects set up, Chevron participated in a study led by Rice University on the "direct and sustainable production of high-purity lithium hydroxide from geothermal brine in solid electrolyte reactors." The study received $500,000 in federal funding.

In essence, geothermal lithium extraction is an atypical brine extraction. Minmetals Securities pointed out that in addition to the typical salt lake brine, there are also abundant potassium and lithium resources in oilfield water, deep marine brine and geothermal brine. Since it is difficult to build salt pans for evaporation and concentration in such projects, innovative lithium extraction technologies such as primary halide adsorption must be adopted.

The agency said that geothermal lithium extraction has not yet been commercialized due to the economics of deep brine drilling, the difficulty of predicting the sustainability of brine extraction, the mutual "fighting" between oil and gas extraction and lithium extraction, the fact that some projects do not allow brine reinjection, and the feasibility of comprehensive utilization.

However, due to the "green and sustainable" label of such projects, a number of companies are already laying out geothermal lithium extraction projects, and have successfully attracted downstream companies such as General Motors, Volkswagen, Renault, and Stellantis to sign underwriting agreements.

At present, the projects that have made progress in lithium extraction from geothermal brine are mainly concentrated in the Upper Rhine Valley in Europe and the Salton Sea in the United States.

In the United States, for example, Berkshire Hathaway, founded by Warren Buffett, has laid out a geothermal lithium extraction project in the Salton Sea, the southernmost part of California.

The Salton Sea, California's largest lake with an area of 343 square miles, is one of the world's largest geothermal resources due to its location at the boundary of the magmatic tectonic plates, and is surrounded by 11 operating geothermal power plants, 10 of which are owned by BHER.

BHER is a Berkshire Hathaway-owned subsidiary. In 2019, the company began promoting the Salton Haiti Thermal Lithium Project, which was approved by the California Energy Commission (CEC) in May 2020.

As of the end of 2021, BHER uses a proprietary ion exchange process to filter lithium from flowing brine and has operated two demonstration plants in the surrounding Imperial Country to produce lithium carbonate or lithium hydroxide, with the first planned to start extracting lithium from the brine and operating in April 2022 and the second planned to be converted into lithium brine products. If the commercial verification of the project is successful, it is planned to start commercial operation as early as 2024.

The Rhine Valley deep geothermal brine project is being developed by Vulcan Energy Resources, a start-up listed in Australia and Frankfurt in Germany. The project is designed to use primary halogen adsorption technology to directly extract lithium from deep geothermal brine, and reinject the tail liquid into the ground, with a planned annual output of 40,000 tons of lithium hydroxide, and the project is planned to be put into production in phases in 2024.

The project has attracted the attention of a number of lithium battery materials, batteries and car companies, among which Stellantis has become the company's second largest shareholder, and has also signed underwriting agreements with Umicore, LGES, Volkswagen, Stellantis and Renault, locking in all production capacity in the first five years of production, and plans to start commercial supply in 2025-2026.

There are also projects in China that are progressing in the area of geothermal lithium extraction.

In January this year, Wanli Stone (002785.SZ), a listed company mainly engaged in building decorative stones, said in an institutional survey that Wanli Resources Company, a holding subsidiary, signed a cooperation agreement with Hangzhou Jinjiang Group and Dangxiong County Yangyi Geothermal Power Station to establish a joint venture company to carry out the comprehensive utilization project of Yangyi geothermal water in Tibet.

The project technology will use Xinjiang Telixin TMS adsorption and extraction technology, the first phase plans to produce lithium carbonate production capacity of not less than 500 tons/year, with an investment of about 30 million yuan, a construction period of six months, and the subsequent second phase plans to build a production capacity of not less than 1,500 tons/year.

According to the company, this is the world's first geothermal resource extraction industrialization project, which is expected to produce 100 tons of lithium carbonate products this year. However, the technical difficulty of the project lies in the fact that the concentration of lithium ions in the water of Yangyi geothermal is extremely low, only 17mg/L.