Can lithium be profitably extracted from beneath the Salton Sea?
There are few places in California, maybe anywhere, weirder or more wonderful than the Salton Sea.
It’s a sparkling blue oasis in the state’s southeastern corner, framed by harsh desert, jutting mountains and seemingly endless green farm fields. Its modern incarnation was created more than 100 years ago, when the swelling waters of the Colorado River overran an agricultural canal. Now it’s drying up, spewing harmful dust into the Imperial Valley’s already badly polluted air.
There are countless stories to be told at the Salton Sea. One of the most fascinating is about lithium.
Sometimes known as “white gold,” this tiny chemical element — it’s the lightest metal on the periodic table — is a key ingredient in the lithium-ion batteries so important for storing solar and wind energy, powering electric cars and keeping our cellphones fully charged. And there’s loads of it dissolved in the underground brine deep beneath the southern end of the Salton Sea.
That super-heated underground fluid — which has no connection to the waters of the Salton Sea — has been used since the 1980s to generate climate-friendly electricity. The steam rising from 11 geothermal power plants can be seen from many miles away. For decades, those plants have tried without success to profitably extract lithium and other valuable metals from the brine.
In a world rocked by climate disruption, success may finally be around the corner.
Several companies are trying to make the Imperial Valley the first major source of North American lithium production — including some powerful new players.
Let’s start with the Australian firm Controlled Thermal Resources.
It’s been nearly a decade since the last new geothermal plant was built at the Salton Sea, and Controlled Thermal might build the next one. The company says it began construction on two well pads in February, with plans to drill test wells in the coming months.
Controlled Thermal has a contract to sell geothermal power, but lithium production has been its major pitch to investors.
The firm doesn’t yet have a deal to sell battery-grade lithium hydroxide — that’s when we’ll know if it’s really likely to succeed — but Chief Executive Rod Colwell said they’re close enough that they felt comfortable starting to spend money to move earth around. They’re now raising a final $37 million toward the $500-million price tag to show “bankable feasibility,” he said.
Colwell has expressed confidence before; he originally hoped to get a geothermal plant built by 2020. But when he says this time is for real, he may be right.
President Biden’s ambitious climate change plans, coupled with the growing number of automakers pledging to stop selling gasoline-powered cars, have led to a surge of interest in new domestic sources of lithium. Colwell says his company has been on the receiving end of that interest.
“After eight years,” he said, “suddenly overnight things started to come together.”
Next, let’s look at the newest entrant in the Salton Sea lithium race: TerraLithium.
This company is a 50-50 joint venture between a start-up, All American Lithium, and a subsidiary of Occidental Petroleum Corp., one of the biggest U.S. oil producers. That may sound straightforward, but there’s a great deal of intrigue beneath the surface.
All American is the latest iteration of a company that originally formed to acquire the assets of Simbol Materials, which developed a much-hyped and highly secretive lithium extraction process.
Simbol’s technology so impressed Elon Musk that Tesla offered to buy the start-up for $325 million. But the deal fell apart, and a few months later Simbol went bust.
Despite that high-profile failure, a string of subsequent entrepreneurs have been similarly wowed by whatever Simbol figured out. TerraLithium is led by former Shell Oil Co. CEO Marvin Odum. Another prominent investor is country music star Clay Walker.
Why is Odum’s company capable of proving the commercial viability of Simbol’s technology where others have failed? He pointed to the engineering expertise and project management experience brought by his team and by Occidental.
“I think one of the problems with the industry out there in the past has been the overpromising and the hype,” he said.
Prospective lithium company No. 3 is EnergySource.
Geothermal companies have built hardly any plants in California over the last 20 years, since the energy they produce is much more expensive than solar and wind power. Utilities and regulators are giving the technology a second look, though, as they begin to see the value of a climate-friendly electricity source that can generate around the clock, not just when it’s sunny or windy.
EnergySource was ahead of the game, opening a new geothermal plant in 2012 after persuading an Arizona utility to buy the power.
Now the company says it’s ahead of the game on lithium too. It’s negotiating sales agreements and expects to start construction around the end of this year on a full-scale lithium extraction plant, CEO Eric Spomer said.
“We’re rolling. All lights are green. We’re done with all our piloting,” he said.
EnergySource has previously described its lithium project as costing $350 million; Spomer now says it will be “north of half a billion.” He also notes that the power plant was acquired last year by Macquarie Group Ltd., an Australian investment bank, from previous owners including Chevron Corp. and New Zealand electricity generator Mercury NZ Ltd.
Another issue worth mentioning is the long-running tension between EnergySource and Simbol Materials’ successors.
The two companies were partners once, but the relationship soured after Simbol’s collapse.
In their latest conflict, EnergySource challenged several patents now held by TerraLithium, essentially arguing its competitor is locking up rights to common mineral-extraction techniques. The U.S. Patent and Trademark Office disagreed, rejecting the last of those challenges last week.
Finally, there is Berkshire Hathaway Energy, which is controlled by legendary investor Warren Buffett.
Berkshire owns the other 10 geothermal plants at the Salton Sea and has made a number of efforts over the years to produce valuable metals. No luck so far, but the company is still trying.
It won a $6-million grant from the California Energy Commission last year to fund a lithium demonstration plant. In January, it added a $14.9-million grant from the federal Department of Energy.
The grants require Berkshire to spend about $19 million of its own money, bringing the total outlay to nearly $40 million.
Berkshire’s vice president for government relations, Jonathan Weisgall, said the company is no longer working with Lilac Solutions, an Oakland lithium extraction start-up backed by Bill Gates (although Lilac is still working with Controlled Thermal). Berkshire’s extraction process doesn’t require significant new technology, Weisgall said, although it does involve converting lithium to a battery-grade product via clean electricity rather than chemical reagents, in hopes of reducing costs and environmental impacts.
Weisgall has a deep appreciation for the Imperial Valley; he has spent a lot of time in the area and badly wants to see it become a lithium hub, even if some other company gets there first.
“It’s a race, but it’s a race that can have a lot of winners,” he said. “If the world demand is going to increase as rapidly and greatly as predicted, there should be room for all suppliers.”
State officials share that vision. Last month, they held the first meeting of the Lithium Valley Commission, with a goal of creating jobs and fueling the clean energy transition. Part of the attraction is the expectation of minimal environmental impacts, unlike in other parts of the world where lithium is produced.
Biden, too, is poised to make domestic lithium production a priority. The president has already ordered a review of supply chains for crucial minerals, including those used in electric car batteries.
So will the Salton Sea lithium dream come true? Promising companies have failed before. But for now, the signs are good. If and when somebody actually agrees to buy lithium, that will be the clearest indication yet that this story is taking a happy turn.