California Wants Imperial Valley to be Lithium Valley

Story excerpt from Bloomberg Business Week - November 19, 2020

Report by: David R Baker

The region’s Salton Sea contains a massive trove of the metal needed for electric-car batteries.

Dust storms laced with toxins sweep across California’s Imperial County, where mud volcanoes spit and hiss near the shores of the slowly shrinking lake known as the Salton Sea. The county is one of California’s poorest, most of its jobs tied to a thin strip of irrigated land surrounded by desert. San Diego and the Golden State’s prosperous coast lie only 100 miles away across a jumble of mountains, but it might as well be another world.

Yet this overlooked moonscape may hold the key to America’s clean-car future. Hot brine trapped beneath the desert floor contains potentially one of the world’s biggest deposits of lithium. Demand for the metal is soaring as automakers worldwide shift to electric cars powered by lithium-ion batteries. Most of that lithium now comes from Australia, China, and South America. The U.S. badly wants its own supply.

There’s no doubt the lithium is there. The brine containing it already flows to the surface day and night through a series of 11 geothermal power plants, clustered around the southeastern edge of the Salton Sea. The plants, operating for decades, convert the 500F water into steam to generate electricity. All that’s needed is a way to strip out the lithium before pumping the rest of the brine back underground. A March 2020 report from research organization SRI International estimated that the Salton Sea area could produce 600,000 tons of lithium a year, almost eight times last year’s global production.

But it’s one thing to extract lithium from the region’s brine as a test and another to do so in bulk, at a reasonable cost. “This is not alchemy,” says Jonathan Weisgall, vice president for government relations for Berkshire Hathaway Energy Co., which owns 10 of the region’s geothermal plants. “The lithium’s there, and we have recovered it in the laboratory. The question is, can it be done in a commercial way?”

Deep-pocketed Berkshire is one of three companies developing facilities to pull lithium from the brine. Elsewhere in California, mining giant Rio Tinto Group has been pulling the metal from old mine tailings. Tesla Inc. has announced plans to produce its own lithium from Nevada clay—something never done at commercial scale. Six years ago startup Simbol Materials LLC claimed to have cracked the code at its Salton Sea demonstration plant, attracting a $325 million buyout offer from Tesla, the Desert Sun newspaper reported. The deal didn’t go through, and Simbol collapsed in 2015, shuttering its plant.

California officials, who have spent years studying the idea, don’t merely see Imperial County as a glorified mine. The lithium, they say, could become the foundation of a local market that could make the U.S. a force in a battery industry that China dominates. They want as many future jobs to be clustered in California as possible. They’ve even started using the name “Lithium Valley” to brand the idea. Because the lithium is there, they reason, why not make the batteries there, too, at factories powered by clean geothermal energy? And if the batteries are made there, why not the whole electric car? “The infrastructure is there, the workforce is there,” says Rod Colwell, chief executive officer of Controlled Thermal Resources Ltd., which plans to build a new geothermal plant, complete with lithium extraction, at the lake. “If we manage to snag one battery plant, you’re talking 3,000 jobs. That’s a big deal for Southern California.”

It would be a bigger deal for Imperial County, where even before the coronavirus pandemic the unemployment rate often ran to 15% or 20%. The county, 85% Latino, suffered one of the state’s worst Covid outbreaks this summer. Its two hospitals were so overrun that some patients were airlifted 500 miles away to San Francisco. “This pandemic has only uncovered what many people were not aware of,” says state Assemblyman Eduardo Garcia, who grew up in the area and now represents it in Sacramento. “We who live here and have been living with the economic challenges have been ringing the bell for years now.”

Governor Gavin Newsom in September signed a bill written by Garcia creating a committee to explore how best to develop the county’s lithium resources. Garcia calls the opportunity a “Wayne Gretzky moment,” citing the hockey great’s famous method of skating to where he thought the puck was going to be. “You can say this is where the puck is going, in terms of our need for lithium batteries and the electrification of our nation,” Garcia says.

The Imperial Valley straddles the Mexican border. In 1905 the levee of an irrigation canal bringing water from the Colorado River about 60 miles to the east burst open. Water poured into a depression in the desert, the Salton Sink, creating a lake whose surface lies more than 200 feet below sea level. It’s slowly drying and shrinking, growing saltier by the year. Pesticides from irrigated fields nearby settled in the lake bed and now sit exposed to the winds, to be swept aloft during dust storms.

Beneath the lake, a bubble of magma—partially molten rock—heats the water that the geothermal plants use. That water, far from pure, holds a sizable chunk of the periodic table. When the power plants were built in the 1980s, no one gave the lithium much thought; the first commercial lithium-ion batteries didn’t hit the market until 1991.

The plants at the Salton Sea draw their superheated brine from wells thousands of feet deep, let it turn to steam inside the plant, use the steam to turn turbines and generate power, then pump it back underground to reheat. Removing the lithium before reinjecting the brine would add a few steps to the existing cycle, giving the plants a new product worth far more than the electricity they sell.

It’s not easy to extract commercial quantities of lithium from the brine, which is packed with potassium, iron, manganese, and sodium. In part that’s because lithium and sodium atoms behave similarly, says David Snydacker, founder and CEO of Lilac Solutions. His startup in Oakland, Calif., has developed its own version of ion-exchange technology—the same concept behind water softening—that uses ceramic-based beads to collect the lithium, without the impurities. Lilac in February won $20 million in funding from investors including Bill Gates’s Breakthrough Energy ventures (Michael Bloomberg, founder and majority owner of Bloomberg LP, which owns Bloomberg Businessweek, is an investor in Breakthrough Energy), and Controlled Thermal Resources plans to use Lilac’s technology at the Salton Sea.

“Lithium is particularly hard to separate,” Snydacker says. “If you tried to use conventional exchange technologies, you’d just end up with a lot of sodium.”

Each company with projects at the lake—Controlled Thermal Resources, Berkshire Hathaway, and EnergySource Minerals LLC—has its own approach to the technology, and each insists reaching full-scale production won’t require further breakthroughs. The pandemic came at an awkward time, when the companies had intended to be finalizing plant designs and raising money.

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