Lithium is rare. According to the US Geological Survey, the lightest of all metals makes up a tiny fraction of the Earth’s crust at .0007 percent. Traditionally there have been two major types of economically viable lithium deposits. The first is entrained in pegmatite, which includes several varieties of hard igneous rock, especially spodemene. Extraction from hard rock is difficult and expensive to process by contrast to the largest single world-wide source of battery-grade lithium carbonate – brine lake waters that contain lithium chloride.
The nation’s only active lithium mine is in Nevada. The Silver Peak lithium mine has been producing lithium from Clayton Valley water since the mid-1960s and is now operated by the Albemarle Corporation based in Charlotte, North Carolina. Before the invention of the lithium-ion battery in the late 1990s, the demand for lithium carbonate was limited to the manufacture of glass and ceramics, lubricants, air filtration systems, pharmaceuticals and other niche uses.
On October 9 of this year, the Royal Swedish Academy awarded the 2019 Nobel Prize in Chemistry to 3 researchers credited with the invention of the lithium-ion battery. Lightweight and rechargeable, lithium-ion batteries power the world’s electric vehicles, hybrids, smartphones, laptops, cameras, and cordless drills, to say nothing of emergency aircraft power or home and grid-scale electrical power storage devices.
The demand for lithium carbonate has surged over the past decade, though the United States lags behind Australia, Chile, Argentina, and China as a miner of lithium. China, South Korea and Japan are the primary manufacturers of lithium-ion battery cathodes. According to the Canadian-owned Lithium Americas Corporation, the US produces roughly 7 percent of the world’s lithium-ion battery cathodes and mines 1 percent of the world’s lithium.
Lithium Nevada, a subsidiary of Lithium Americas, says it has identified the nation’s largest known deposit of lithium in Nevada’s Humboldt County, the Thacker Pass project. The deposit is unusual in that the lithium is in soft sedimentary rock, the remnants of an ancient volcanic lake.
Scientists and engineers at the Lithium Nevada testing facility in Reno are developing a new but not necessarily novel process particular to the Thacker Pass resource. From the highly friable hectorite, the process is intended to refine lithium carbonate or lithium hydroxide to the exacting specifications of battery makers and other customers as cost effectively as a brine operation.
To learn more, Lithium Nevada chief executive officer Alexi Zawadzki stopped by the Innevation Center in Reno recently to discuss the proposed Thacker Pass lithium mine.
Any mine that digs into the Earth will have an environmental impact on the land, plants, animals, water and air, but not all mined substances have the same ultimate consequences. Oil wells and coal mines come with global environmental impacts when those fuel sources are burned, an impact well beyond the mine’s actual footprint. Mined lithium has the opposite effect on the global climate.
Lithium chemicals are the essence of battery technology that enable lightweight and highly efficient storage of electrical energy. Lithium-ion batteries enable electric vehicles and hybrids. Lithium-based home and grid-scale energy storage units enable the convenient and most efficient adoption of intermittent, renewable forms of energy such as solar and wind. Lithium chemicals have the potential to truly move the carbon balance needle on a planetary scale. We asked if Alexi Zawadzki considers himself an environmentalist.
“Yes … I’m not here to disparage any other project or anything like that, but since you asked the question, my last company I had was a renewable energy company. We built small hydro projects. I did that in a very principled way. Prior to that I was working on hydrocarbons as a consultant, not as an owner, but I wanted to get away from that industry.
“I’ve got children. I wanted to leave this world a better place than where I came, so we built these small hydro projects, and they were great, beautiful, elegant projects, but are they going to move the needle, and I didn’t see that. So I looked at my skill set, and I said, ‘okay, where, where can I move the needle,’ and that was lithium.
“I looked at this project, and this is significant. This is a globally significant project. And, you know, you’re right. That is my motivation. I’m still focused on value creation … this project will make money and all the rest. But my philosophy does play into this. I’m very motivated to decarbonize the economy.”
Lithium Nevada submitted a detailed plan of operations for the Thacker Pass project to the US Bureau of Land Management (BLM) and Nevada Division of Environmental Protection this summer. According to Zawadzki, his company has been working with both state and federal regulators while developing the mine’s plan of operations to prevent permit approval surprises.
In its fully developed form, the project proposes an open pit and an associated processing facility to include a sulfuric acid plant. Such an operation has the potential for significant environmental impact, so the BLM is obligated through the National Environmental Policy Act (NEPA) to evaluate the project using an environmental impact statement or EIS process.
The BLM is currently evaluating the mine’s proposed plan and is expected to publish a notice of intent to prepare an environmental impact statement in the Federal Register this December. Once the notice of intent is published, the agency has 12 months or fewer to process the EIS under a Trump Administration executive order that forces a one year timeline. Should the BLM publish the notice of intent in December of this year, Lithium Nevada could conceivably begin construction by the first quarter of 2021, barring prohibitive findings during the environmental impact statement process, which includes public hearings.
Another Trump Administration executive order gives the project strategic significance. Executive Order 13817 is dated December 20, 2017 and gives the Department of the Interior, in consort with the Department of Defense and other related agencies, the directive to create a list of critical minerals.
The executive order defines “critical minerals” as “essential to the economic and national security of the United States, the supply chain of which is vulnerable to disruption, and that serves an essential function in the manufacturing of a product, the absence of which would have significant consequences for our economy or our national security.”
The order further instructs the Department of the Interior to identify new sources of these minerals and “increase activity at every level of the supply chain.” The order also asks for a strategy to reduce the nation’s reliance these minerals, propose substitutes, and to make recommendations to streamline the permitting process for resource extraction.
Lithium is on the list of critical minerals published in May of 2018. The associated report concludes that the demand for lithium used in rechargeable batteries, especially for electric vehicles, will continue to grow. Federal authors also mention the potential use of lithium for “cooling water chemistry control in pressurized water reactors,” an advanced-concept of a type of nuclear power plant.
According to the report, increasing consumption of lithium chemicals, both in the US and abroad, has prompted “a substantial exploration boom.”
Further emphasizing the strategic importance of the Thacker Pass project, on May 14 this year, Jonathan Evans, president and chief operating officer of Lithium Americas gave testimony to the US Senate Committee on Energy and Natural Resources to outline his company’s efforts at Thacker Pass.
Evans told federal lawmakers Thacker Pass is expected to yield “enough lithium chemicals to fulfill 25 percent of today’s global lithium demand when in full production.
“Currently, the U.S. produces just 1 percent of lithium minerals and 7 percent of lithium chemicals. Once in production, Thacker Pass will produce enough domestically sourced lithium chemicals to encourage the development of large-scale cathode, battery and end-user manufacturing in the U.S.”
If the Thacker Pass project develops as Lithium Nevada expects, the new domestic source of lithium chemicals could make the United States a much larger center of gravity for the lithium-ion battery supply chain.
According to a USGS estimate, 2018 world production of pure elemental lithium was around 85,000 metric tonnes. The same report concludes the United States currently has a net import reliance of greater than 50 percent of the lithium it uses, and with a single mine in operation and a small fraction of the world’s battery cathode manufacturers, that’s not a surprise.
Lithium is generally measured as lithium carbonate equivalent or LCE. The 85,000 tonne figure above refers to pure elemental lithium. All Lithium Nevada figures and estimates are in LCE. To convert elemental lithium metal to LCE you multiply by 5.323. So 85,000 metric tonnes of lithium metal is actually 452,455 tonnes LCE.
According to the Lithium Americas 2018 annual report, phase 1 of the Thacker Pass project projects an annual production capacity of 30,000 metric tonnes LCE by 2022. Phase 2 estimates an annual production capacity of 60,000 metric tons LCE per year by 2026.
In his testimony to US senators, Evans shed light on the mysterious workings of the worldwide lithium battery supply chain.
“Lithium travels a long journey before ultimately rolling down American streets in a new plug-in vehicle,” Evans told senators. “The supply chain is physically distant and highly vulnerable to transportation risk, political disruptions and foreign economic policy. By and large, lithium minerals are currently mined in Australia, Chile and Argentina. Lithium concentrates and chemicals are then shipped mostly to China, Japan and Korea and formulated into cathodes utilized by battery manufactures such as Panasonic for electric vehicles, home storage and personal device batteries.
“This global supply movement produces financial inefficiencies that are ultimately shouldered by domestic consumers. In addition, the necessity of transporting every ounce of lithium material on two overseas journeys before becoming a final product in the U.S. generates greenhouse gas emissions from shipping that could be avoided by developing a vertical supply chain in the U.S. Cathode and anode materials for lithium-based battery cells are produced almost entirely in China, Japan and Korea.
“There has been substantial under-investment in this business within the United States; it will take a sustained public-policy commitment to promote the development of the technology, expertise and capital needed to make the U.S. competitive in this area. The Thacker Pass project presents a critical catalyst that will ignite extensive downstream business development, with the right public support.”
According to Evans, Lithium Nevada has already invested more than $75 million in Nevada since 2010. The Canadian-owned company expects the mine to yield some $35.2 billion in lithium over a 46 year period.
Lithium Americas, through subsidiaries, is developing two lithium mining and production facilities. The Cauchari-Olaroz Project, located in the Province of Jujuy in Argentina, is nearing operation. The facility will extract lithium from brine pumped from the salar and solar evaporation, similar to the Silver Peak Project in Nevada. The company’s second project is the Thacker Pass lithium mine and processing facility in Nevada’s Humboldt County.
The Thacker Pass Mine
According to a prefeasibility study, the mine will feature an open pit developed over nearly 50 years. Miners will dig using conventional continuous mining equipment. Minimal blasting and crushing is expected, as the deposit is in soft rock, almost dried mud.
The slurried ore will be processed in a “leaching circuit” using sulfuric acid to separate the lithium from the soft stone. The lithium bearing solution will then be purified using crystallizers and reagents to produce battery-grade lithium carbonate or lithium hydroxide.
A state-of-the-art sulfuric acid plant will be constructed adjacent to the mine site and processing facility. Lithium Nevada has partnered with the industrial construction firm Kiewit to build the plant and other facilities. The goal is to make the processing and production of saleable lithium chemicals as efficiently as possible. The other goal is to minimize the operation’s environmental footprint. To those ends, the sulfuric acid plant is key.
“That’s a core part of our process (making sulfuric acid) towards making lithium so cost effectively, as well as reducing the environmental footprint. The reason I say that, we make our own sulfuric acid. It’s cheaper. There’s less materials being brought in. There’s less material flow, which means a smaller environmental footprint. We bring in one part sulfur, elemental sulfur, and make three parts sulfuric acid by using water at the site.
“And how we do that it’s basically a burning process. It’s exothermic, so a lot of heat, we burn the sulfur, mix it with water, and we make sulfuric acid. Now that’s all done very cleanly, very safely. We want to be a world leader in environmental sustainability and sustainable processing practices. So the best available technology is being used right now. It’ll be among the cleanest sulfuric acid plants in the world.”
Zawadzki said he is working to design a mining operation with a carbon neutral footprint.
“We’re targeting that. I don’t know whether we’re going to get there at the moment, but we are certainly looking at every part of our process and we’re doing a carbon accounting process. For every bit of our mine and chemicals facility.
“I mentioned we burn sulfur to make sulfuric acid, that heat is captured, and we’re using that heat to make electricity to run the facility. So that’s carbon free electricity. We don’t burn carbon for that. By doing that, we’re getting very close to being carbon neutral at the plant. There’s some things we still need to do.
“We’re looking at electrified equipment, heavy equipment. That’s all very new and it’s evolving. We see it underground, and it’s quite popular now underground. It’s getting more popular underground, but above ground units, big trucks, big excavators, that’s still a bit too early stage right now for us to consider but we are looking at (electric) transport trucks. Tesla’s got their semi that they’re advancing. It looks like it’s being commercialized. We’ve seen Pepsi just announced this week that they’re buying a bunch of them, so we’re going to take a good look at that and that should further reduce our carbon footprint.”
A New Method of Remediation
Mining is highly skilled labor. A point made in Lithium America’s 2018 annual report is that the company has never brought a mining project into production. To offset their lack of mine development experience, Zawadzki said the company has made some key alliances and are proposing a new method of remediation for an open pit mine in Nevada.
“We’ve got a commercial agreement with a company called North American Coal. North America has been around for over 100 years. They operate 18 mines around North America. These are big coal mines. Most of them are coal mines, some are aggregates, but what they have developed over these many, many years of mining is reclamation skills. Their reclamation capabilities are second to none.”
Gold, copper and other mines are noted for leaving behind mammoth holes in the ground, often filled with toxic water. Such sites need to be cordoned off forever. The Thacker Pass project includes a plan to backfill the open pits, a method new to Nevada.
“We went to one of their (North American Coal) facilities where they have developed a trench mining and progressive backfilling methodology. As mining progresses along a trench, they’re filling in behind them, applying a growth medium and planting vegetation. You’d never guess it was a mine, and that specific process is new in Nevada. We’re going to bring that technology to Nevada. We’re planning on backfilling to a very large extent. We’re not proposing any pit lakes. In fact, we don’t even hit groundwater until year 25 of mining.”
Alexi Zawadzki compared the ways in which lithium is currently mined to the Thacker Pass project.
“The project in Argentina is a brine project. Brine is basically a very salty groundwater. Right now, commercially, there are two processes that are used to make lithium. One is from brine and the other from hard rock, and they’re both different.
“Brine is cheaper but takes more time as you’re using the solar radiation to evaporate and basically concentrate your brine. You might be familiar with the Silver Peak lithium mine here in Nevada. That’s a brine process, and they use evaporation ponds. That’s what we’re doing in Argentina.”
The McDermitt Caldera
The McDermitt caldera is widely thought to be the first and most ancient in a series of Yellowstone hotspots, a chain of eight giant volcanoes that extend across the Snake River Plateau from McDermitt to Yellowstone. Today, the caldera is rich in concentrated forms of minerals to include lithium.
Zawadzki said the resource at Thacker Pass is unusual, so the lithium extraction process being developed is as unique, but Zawadzki emphasized that the process is not a “science project” but is based in well-established methods.
“It’s a sedimentary hosted ore. Sedimentary is soft rock. Think of it as being softer,” Zawadzki explained. “You can break it apart with your hand. We put it in a glass of water and within five or 10 minutes it disassociates and you have basically a layer of sediment on the bottom. You shake it up and that turns into a slurry, and that’s what makes our project special. That’s all we do with our ore.
“We take it out of the ground. We take some of the bigger chunks out of it, and then we mix it with water and it forms a slurry. That’s very different than hard rock. Hard rock you have to blow it up. You have to excavate it out, grind it, roast it even to 1000 degrees, very energy intensive, very large environmental footprint, and very expensive. It’s the most expensive way to develop lithium,” Zawadzki said.
Zawadzki said the process for the Thacker Pass deposit will be price-competitive with brine extraction methods. Moreover, the nature of the McDermitt Caldera resource and associated process has operational advantages over brine that relies on the sun to evaporate water and concentrate lithium brine in the bottom of a giant, lined pool.
“With our sedimentary process, we have costs that are more similar to brine, cheaper than rock. But we also have all the benefits of rock in that we don’t have to wait. It doesn’t matter if it’s raining, snowing, winter, summer we can produce. It’s a short production time period. Basically, within a day or two, we’re taking lithium out of the ground and turning it into a product.”
For batteries, that product is a very specific form of lithium carbonate or lithium hydroxide. There is no central market for these products. Every manufacturer has particular chemical specifications. The chemistry of every battery is different and proprietary.
The Mysterious Lithium Market
The price for industrial metals like copper, lead, and aluminum among several are established on various commodity markets. The relative values of precious metals like gold, platinum, and palladium and others are also calculated in real time throughout the trading day in markets around the world such as the Shanghai Gold Exchange.
Worth noting, even though the prices of these metals are well known, the exact amounts of metal traded is largely a mystery but not nearly as opaque as the price and availability of lithium chemicals.
The price of usable lithium chemicals is established between a supplier and a purchaser. The price and US production numbers of battery-grade lithium carbonate are industrial secrets. In May of this year, Alaska Republican Sen. Lisa Murkowski introduced the American Mineral Security Act. The law would speed up the permitting time for mines of critical minerals. The proposed law would also mandate the aggregation of lithium chemical manufacturing numbers and associated price data.
“The lithium market is fairly small and it’s changing very rapidly,” Zawadzki said. “Historically, lithium was primarily used in ceramics, was used in greases, used in pharmaceuticals and a bunch of specialty stuff in a fairly small market. Ten years ago, that market might have been a billion dollars a year, not a huge market compared to say copper, gold, silver.
“Since the development of the lithium-ion battery in the in the 1990s, that started to change the lithium space, probably in the last five, six years. We saw a lot of lithium battery manufacturing facilities start to get completed. Tesla in Nevada is the one that comes to mind. Basically that demand was driven by electric vehicles. Electric vehicles really started to come onto the market 2009, 2010, very, very small numbers ramped up very, very quickly. And that’s where the demand is being driven right now both electric vehicles as well as stationary storage is becoming much more popular, much more cost effective, basically storing renewable energies like solar or wind in batteries to be deployed during peak and super peak hours in the evenings where the sun may not be shining and the wind will not be blowing.”
In order to compete, Lithium Nevada must produce lithium chemicals to exacting standards.
“It’s not really a commodity. It’s not like coal where you can sell it through bulk distribution. It’s really a specialty chemical,” Zawadzki said. “So there’s not one type of lithium that’s available, you have everything from pure lithium metal to various lithium salts that are sold. Each chemical has their own specifications, their own purity requirements. Those purity requirements are way more stringent, they’re moving into the direction of way less impurities coming from the battery sector. So less impurities means more stable batteries, greater energy density.
“Generally, in order to sell your product, you negotiate a sales contract with a customer and that customer will give you a spec list. This is what the maximum impurity can be. And you have to make that spec list and then you get a contract to sell, typically, medium term contracts, short to medium term contracts, months to a few years are what’s entered into. And that’s a direct contract from supplier to customer.”
Northern Humboldt County is remote. Economic development is a challenge. The region is home to Nevada’s largest irrigated farm and few major gold mines, but outside the county seat of Winnemucca, average annual incomes plummet. For instance, a high percentage of residents in McDermitt and Fort McDermitt Paiute and Shoshone Indian Reservation live in severe poverty.
On national and international scales, Zawadzki said the new supply of domestic lithium chemicals could help spur US lithium battery production capacity.
What the new mining operation will spell for the rural Humboldt County is difficult to predict. A 2017 study by Buddy Borden, a specialist in community and economic development for the University of Nevada Reno Cooperative Extension and Tom Harris, professor and director of the University Center for Economic Development, University of Nevada, Reno, examines the potential economic impact of the Lithium Nevada Thacker Pass mine on Humboldt County.
The report has economic impact calculations for mine construction, mining operation, and processing. The impact model for mine construction concludes that for each $1,000,000 of direct investment in lithium mine construction generates an additional $214,545 in secondary impacts. Of the $1,214,545 of total impact, $452,978 is from personal income and supported 8.6 jobs. The study concludes that every $1,000,000 of direct investment generates $37,610 in state and local taxes and $96,079 in federal taxes.
With an eye toward beginning construction in 2021, Lithium Nevada has been working with Humboldt County rural communities to lay the ground work to develop a local workforce.
“There’s a lot of opportunity that we have to capitalize on that locally … we have to get engaged early to provide training and understand who wants employment here and what are their skill sets, what are the capabilities, and what do we need to do to take those capabilities where they are today to where we need them.
“So we’re starting that right now. We’ve got agreements with Great Basin College, where they’re going to be doing some teaching programs. We’re talking about mobile classrooms that we can take to McDermitt take to Orovada so we’re looking at that. We’re talking funding as well. We were talking to Senator Cortez-Masto the other day. She was at our research facility. She’s going to help us identify funding programs at the federal level that we can bring to our project.
“You gotta start that really early in order to for it to be meaningful and to have the desired result because the time to start training is not when you flip the switch on at the plant. You have everyone hired at that point,” Zawadzki said.
Music credits in order of appearance as reported through the Public Radio Exchange:
Album: Safe in the Steep Cliffs
Label: Loci Records
Artist: Boards of Canada
Album: Music Has the Right to Children
Label: Warp Records
Song: Open The Light
Artist: Boards of Canada
Album: Music Has the Right to Children
Label: Warp Records
Song: Lightness of Being
Artist: Paul Avgerinos
Label: Round Sky Music
Song: Lizard Tooth Eye
Album: Nut Roast
Label: Pork Records
Song: Personality (Jungle mix)
Artist: DJ Rodriguez
Album: Worldwide Funk (Ohm Guru Presents