With EVs On The Rise, Mining Company Goes After Lithium in Nevada

Jan 22, 2019

Across the globe, more and more people are buying electric cars. That has spurred the need for lithium, which is used to make the car batteries. Financial analysts project that demand will double between 2015 and 2025.

All this has driven the Canadian-owned company Lithium Nevada to go after a massive deposit in Northern Nevada. 

The potential mine site is atop an ancient collapsed volcano in the middle of the desert called the McDermitt Caldera; it’s a few hours north of Winnemucca. Sixteen million years ago, the crater filled with water leeched the lithium from rocks. Now, this highly concentrated lithium clay sits only several hundred feet below the surface, making it easily accessible for pit mining.

The unique challenge for Lithium Nevada is that unlike all lithium mined around the globe一which comes from hard rock or salt brines— here the lithium is in clay.  

“That’s where the focus has been: is how to extract the lithium from the clay most effectively, because this will be the first time it's done,” says Randall Burns, a geologist with Lithium Nevada.

To make the proposed mine economically viable, the company has built a pilot plant in downtown Reno to finetune the extraction process.

Tackling a chemistry challenge

On a recent morning, Lithium Nevada metallurgist Brett Rabe gives a tour of the lofted garage-like space. The lab is littered with tubs of dirt and various whirring contraptions to help dissolve the prized lithium clay into water.  

“We moved in October 1, and so everything you’re seeing here is what we’ve done in the last few months,” says Rabe.

“Back in September, we went out and drilled about 70 tons of ore from our deposit in Humboldt County, we put that ore into bulk bags and those bulk bags are sitting in these three shipping containers,” says Rabe, opening the metal storage container to reveal giant plastic bags, each containing two tons of dirt.

Each bag weighs as much as a small sedan, and the clay contains about 0.3 percent lithium.  That’s actually one thousand times more concentrated than many other lithium operations.   

Rabe’s goal here at the pilot plant is simple: find a way to extract as much lithium as possible using the smallest amount of expensive chemicals.  

“Our largest cost component, up to, as it is right now, almost 40 percent, is directly related to cost of sulfuric acid,” says Rabe.


Betting on the growth of EVs

Once they master the formula, the potential is significant. But up until now, it hasn’t been worth the trouble to try. Randall Burns says geologists have known for decades about the lithium at the McDermitt Caldera. The mining claims used to be owned by Chevron.

“So, what Chevron was doing in the 70's was actually drilling the volcanic rocks looking for uranium. For the nuclear power, it was the next fuel,” says Burns.

“They were drilling through these clay muds, and they noted that there was high lithium in it, but in the 70's and the 80's, there was no lithium market.”

Chevron eventually sold the mining claims.  

But now, Burns says, “the economics are lining up right, the market demand for batteries is now known it’s going to grow, and the timing is right.”

Sales of electric cars in China are predicted to continue to surge.
Credit Courtesy Cormark Securities

Burns isn’t the only one anticipating significant demand for lithium. Financial analyst MacMurray Whale works for the brokerage firm Cormark Securities. He has been tracking lithium for decades.  
 
“The advantage of the McDermitt project is that it’s huge. It has the potential to be really, really, really big,” says Whale.

Efficiency is key to being competitive

But Whale notes that’s because lithium hasn’t been mined from clay before, the company has a learning curve.

“The chemistry and the conversion, the track record of doing that, is just zero.”

Whale says once the company proves out the processing of these materials, it could be a key supplier.

According to Whale’s research, back in 2000 batteries for electronics made up only 5 percent of the demand for lithium. Now, electric vehicles alone make up nearly half the demand.

Whale says there is competition, other mines are increasing their production to capture the rising prices, but he anticipates that those increases alone won’t be enough to meet the global market needs.  

“If the demand in EVs continues as we see, and markets such as Germany, Europe— and maybe ten years from now the U.S.— rise, like have seen elsewhere, like in China and Norway and other places, then will need those projects, and you’ll need them sort of instantly.”

And Lithium Nevada is hoping their mine will come online at just the right time.  

Environmental impact  

The company is still applying for mining permits with the Bureau of Land Management. That approval is contingent on environmental and cultural assessments.

Officials from the Nevada Department of Wildlife say possible studies that may need to be conducted include surveys of pygmy rabbits, raptor nests, Lahontan cutthroat trout, burrowing owls, bats, sage grouse, bighorn sheep, and migratory land birds.  

Lithium Nevada representatives say they have surveyed the area, and their initial mine pit would be just off the highway near McDermitt in an area that does not include any critical habitat. The company has also developed a plan to put much of the processing equipment inside a structure to mitigate the noise for nearby sage grouse.

Editor's Note: An earlier version of this article misspelled Lithium Nevada Metallurgist Brett Rabe's name. All instances have been corrected.