➤ Direct lithium extraction (DLE) is the future of global brine production because of its lower costs and environmental impact, according to Australian startup ElectraLith.

➤ CEO Charlie McGill sees the company's "direct lithium extraction and refining" surpassing other DLE methods because it does not need water or chemicals.

➤ ElectraLith is testing brines for major shareholder Rio Tinto's Rincon lithium project in Argentina and is fielding interest from other miners.

ElectraLith CEO Charlie McGill. Source: ElectraLith Pty. Ltd.

ElectraLith Pty. Ltd. was spun out of the Research Hub for Energy-Efficient Separation at Australia's Monash University in June with seed funding from Rio Tinto Group and London venture capital firm IP Group PLC.

It is testing brines from Rio Tinto's Rincon project amid interest from other lithium players looking to DLE to lift lithium extraction rates while lowering costs and improving the sustainability of their operations. Rio Tinto owns a 30.8% stake in ElectraLith.

ElectraLith says its patented membrane separation technology eliminates the need for water and chemicals and can run entirely on renewable energy. The company also says it can produce lithium hydroxide in a single-step, modular and scalable system that can be applied to any lithium source including brines, geothermal, oilfield, recycled material and even spodumene deposits.

S&P Global Commodity Insights spoke with ElectraLith CEO Charlie McGill about where his technology fits into the emerging DLE landscape. The interview has been edited for clarity and space.

S&P Global Commodity Insights: How do you see the DLE landscape evolving, given the recent entry of ExxonMobil Corp. and other oil companies in the context of the challenges seen thus far?

Charlie McGill: The technology across the board is improving daily. We expect all lithium brine projects from here on will be done by DLE. The problem is that it's really good, but it's an emerging technology. It hasn't really caught up with demand just yet.

So you've got a number of players that are trying to do it, and they're using different technologies to crack the code of DLE. Some are better than others, and some of them are further developed.

DLE right now is about 10% of global lithium production, but countries like Chile and Bolivia have said "all new mines must be through DLE — we're not allowing the old evaporation method going forward."

Thus you have a situation where groups want DLE and they're putting in DLE today, but it's not as advanced as they would like it to be or as the providers want it to be. So the providers are doing [research and development] rapidly to catch up with the demand. It's like everyone is switching to electric vehicles, but there aren't enough batteries to go around.

The easiest area and where most attention is focused is on the large salar deposits in the Latin America triangle. The emerging space is the oil fields, where ExxonMobil and these other guys are playing, and that's primarily the Smackover formation in the southern US. The trick there is that you've got to find a DLE that can work at the concentrations of lithium that you see in those deposits.

How does your technology work and fit into the bigger picture of DLE technologies out there?

Our type of DLE is called DLE-R, for "direct lithium extraction and refining." As opposed to other DLEs, our process is without water and chemicals, and we also can go directly into refining, whereas others require a further step after the DLE process.

There are basically four types of DLE — adsorption, which is what we're seeing in the market today, that's been proven. There's ion exchange and solvent extraction, which are kind of proven, and there is membrane separation, which is what we're doing and is in development.

Our view is that our membrane technology will essentially become the industry standard. That gets you to a position where you can run on solar power to produce lithium hydroxide in a single step, which the existing technologies can't do.

We think DLE will be the new way of doing brines full stop. We're just catching up, but developing the technology very rapidly. Others are ahead of us, closer to commercialization and testing it, which is why you see all that press about it.

We're still at the research and development stage so not ready to commercialize. We're probably 12 to 18 months away from actually being able to put up a demonstration plant in Argentina or elsewhere.

Rio Tinto is a major shareholder. Is its Rincon project the logical place for your technology?

Correct. Rio Tinto has invested in us because they like our technology, but ideally, anybody could use it. We're not exclusive to them commercially by any stretch. Rincon is the most logical place to apply DLE-R, that's why they are investing in us. Having said that, we are in advanced discussions with others, and Rio Tinto as an investor is very supportive of those discussions with others to commercialize and make money out of this technology.

The vast majority of our laboratory testing in R&D is based on the brines that Rio Tinto has in Argentina, which is one of the largest deposits. So even though we're not commercial to them exclusively, they gave us their materials, then we test on those materials knowing that if we can do it for them, we can do it on their neighbors' projects.

We see a lot of interest from the Latin Americas as that's our core business due to Rio Tinto's involvement, but we are in discussions with Sociedad Química y Minera de Chile SA about some commercial testing, nothing formal at this stage. And we're in discussions with oil and gas majors in the US to test and explore development opportunities.

We're also in discussions with one geothermal player in the UK to test their brines and show them that it works, then we can talk about how we want to commercialize.

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