Junior lithium explorers and miners are working around limited water rights in Nevada's Clayton Valley region by adopting emerging direct lithium extraction technology, according to companies attending Fastmarkets' 15th Lithium Supply and Battery Raw Materials conference June 20–22.
Clayton Valley hosts lithium-rich brine and clay deposits and is home to the only operating lithium mine in the US, North Carolina-based Albemarle Corp.'s Silver Peak. The mine has operated since 1966 and holds almost all water rights within the valley, leaving newcomers with scant options to maintain operations.
Almost 30 companies have flocked to the valley hoping to mimic Albemarle's success amid historically high lithium prices, and all of the brine projects are considering using direct lithium extraction (DLE) over evaporation pools, according to the Nevada Division of Minerals.
"This Silver Peak operation, which was acquired by Albemarle, has been going on for 45 years or so, and the evaporation ponds [in use] have been grandfathered into the permitting process. Going forward, I think that's going to have to change. DLE is the way of the future," Mary Little, director of Pure Energy Minerals Ltd., told S&P Global Commodity Insights on the sidelines of the conference.
"Water is such a huge issue. ... The whole west has been in a drought for several decades, and DLE has a much smaller footprint," Little said. Pure Energy has partnered with Schlumberger Ltd., which recently rebranded as SLB, to build and operate a DLE pilot plant in Clayton Valley.
Albemarle has faced several legal battles over the years with companies accusing the lithium giant of holding the valley's water hostage. Pure Energy Minerals has land claims directly adjacent to Albemarle's claims and the company lodged a complaint against Albemarle in March 2022.
"Albemarle has been using the State Engineer's office and regulations as a pawn to maintain a monopoly on water in Clayton Valley," Pure Energy Minerals said in the complaint. "Albemarle has admitted, year after year, that [the company] is able to use approximately half of its allotted water rights."
Albemarle reached a settlementwith a separate company, Nevada Sunrise Metals Corp., over the issue in 2019. Albemarle announced plans in January 2021 to double its production in the valley by 2025, saying in a news release that it would make "full use of its brine water rights."
Albemarle and SLB did not respond to requests for comment.
For smaller, junior explorers, deploying a DLE plant is much more difficult. "It makes sense to have a large DLE plant built in Clayton Valley, and the constituents here use it for processing and sign sales agreements, offtake agreements, whatever it may be, with the common plant," Stephen Hanson, president and CEO of ACME Lithium Inc., told Commodity Insights.
"We believe that water rights should be shared by multiple constituents in the valley ... parties that are using best practices, developing resources, creating economic benefits," Hanson said.
DLE uses specialized modules to separate the lithium molecules before reinjecting the brine into the ground. Additional water is recovered when the lithium is processed into lithium carbonate. The technology also allows for higher and faster lithium recoveries. Yet, US-based Livent Corp. is the only miner outside of China that commercially using DLE, at its Salar del Hombre Muerto property in Argentina.
Canada-based junior miner Century Lithium Corp. plans to use DLE technology to process clay deposits in the valley instead of using a sulfate solution to leach the metals.
"DLE was part of our process, to begin with. And then, after discovering we only have X amount of water, it's been all about, 'How do we recover that water?' We recycle every bit of our water," said Todd Fayram, senior vice president of metallurgy at Century Lithium.
As the spotlight on lithium grows as part of the energy transition, Nevada has become a premier jurisdiction for new projects within the EV supply chain, making the conflicts at Clayton Valley an ongoing issue.
"I fully suspect there's going to be more court cases [against Albemarle] out of this whole thing by the time it's done," Fayram said.
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