The US Department of Energy (DOE) has committed to a $1.4 billion loan for a project that will use an emerging technology to separate lithium from geothermal brines in California. The agency says the loan, to EnergySource Minerals, is an important step toward establishing a battery supply chain in the US.
EnergySource plans to build a direct lithium extraction (DLE) plant in Imperial County, near the Salton Sea. At full capacity, the firm hopes to produce 20,000 metric tons (t) of lithium hydroxide per year, enough for about half a million electric car batteries. EnergySource had hoped to start operating the plant this year but now says trial operations are slated for 2026 and full production is expected by the end of 2027. EnergySource will have to meet certain conditions before closing the loan.
EnergySource has secured investments from the oil-field services company SLB and from Livent, a lithium producer that has used DLE in Argentina since the 1990s and is being acquired by the mining firm Rio Tinto. Both investing firms are testing EnergySource’s technology for their own DLE projects. In 2023, EnergySource agreed to sell lithium from the California plant to the carmaker Ford.
Several other firms hope to deploy DLE beneath the Salton Sea, including Controlled Thermal Resources and an energy-focused subsidiary of Berkshire Hathaway. But all the companies face hurdles, says Cameron Perks, a lithium analyst with the research firm Benchmark Mineral Intelligence. “The Salton Sea has always had this reputation of being difficult,” he says.
Brines beneath the Salton Sea typically have a low lithium concentration compared with brines in South America. They also contain a long list of less valuable metals, making it hard to separate lithium. Coproducing lithium and electricity at geothermal power plants could make these projects more profitable, but the hot brines have caused some DLE components to break down.
Controlled Thermal Resources had planned to use an ion exchange-based extraction method from Lilac Solutions, but it has switched to an adsorbent system that can handle hotter brines. Michael McKibben, a researcher with University of California, Riverside, who has characterized the California brines, says Berkshire Hathaway’s initial adsorbent broke down, so the firm teamed up with TerraLithium, a joint venture involving the oil firm Occidental Petroleum, to develop a more robust one. TerraLithium’s adsorbent is based on technology from Simbol Materials, a start-up that tried to exploit Salton Sea brines a decade ago.
McKibben says the companies working in California have fine-tuned their DLE systems to overcome these challenges. He says they have tested their processes only at small scale, but he’s optimistic that some projects could reach production within the next few years.
Meanwhile, projects in Arkansas’s Smackover region have been moving toward commercialization faster. After securing a $160 million investment from the oil firm Equinor last year, Standard Lithium licensed Koch Technology Solutions’ DLE technology for a 22,000 t lithium plant there. ExxonMobil is also developing an Arkansas DLE project, and the battery makers LG Chem and SK On each say they’ll buy up to 100,000 t of lithium chemicals from it.
Ian Lange, director of the Colorado School of Mines’ Mineral and Energy Economics program, says the progress in Arkansas demonstrates that the private sector already considers the Smackover region a good bet. Thus it makes sense for the US to offer a loan to a project at the Salton Sea, where investors have been more hesitant, he says.
“You don’t want the government investing in things that the companies would have invested in anyway,” Lange says. “You want the government investing in things that are right at the edge.”
In an online newsletter from Jan. 16, Jigar Shah, the recently departed director of the DOE’s Loan Programs Office, says the US has plenty of lithium in unconventional sources, such as geothermal brines or clay. He says boosting domestic production will require investment into next-generation technologies like DLE, though he acknowledges that it won’t be easy. “Brine and clay resources have the greatest but most unpredictable scale-up potential,” he says.
EnergySource’s loan follows several other moves by the DOE to strengthen battery supply chains in the US. In January, the DOE closed a $996 million loan to Ioneer for a lithium mine in Nevada. That follows the closing of a $2.3 billion DOE loan for Lithium Americas’ Nevada lithium mine in October and a $225 million DOE grant for Standard Lithium’s project in September.
Lange says the US government has a strategic interest in encouraging the development of domestic lithium production. Chinese companies produce most of the world’s lithium chemicals, so the US is eager to establish local sources to buffer against trade disruptions, even if they are more expensive.
