In Nevada's Deserts, Exploration Startups Seek Lithium Riches

Jun 29, 2016

Credit Beatrice Murch, Flickr, CC by SA-2.0

Nevada’s prehistoric lakebeds are more than just picturesque, they’re the site of a lithium rush taking place on public lands. This quest for alkali riches has been fueled by a surge in worldwide demand for batteries.

For more than a century, prospectors have searched for lucrative minerals across the American West under the Mining Act of 1872.

That law allows them to stake a claim on a piece of ground and whatever minerals may be hidden beneath. Lately, in Nevada at least, the area drawing the most interest are its salty, ancient lakebeds.

“There’s actually a steady exploration activity level that occurs in Nevada,” says Rich Perry, head of the state’s Division of Minerals.

“And we monitor that every year in the number of drill projects that are done. As of last year, that had dropped to about 70 [active exploratory projects], so less than the peak obviously. Probably the most interesting of those has been a staking boom on federal land for lithium exploration.”

He says these playas provide the perfect chemical conditions for the alkali metal.

“Lithium in Nevada is mined as a brine, so you drill a well in a basin that has just salt brine in it, and not fresh water, and that’s pumped as a lithium chloride, and then the lithium is removed from that.”

According to the Bureau of Land Management, there are currently 13 lithium stakes on public lands in Nevada. That’s thanks in large part to commodity prices more than doubling over the last year, propelled by demand for batteries used in electric cars and storage devices.

Tesla, which plans to produce its own batteries outside Reno, inked a deal last year with a Vancouver-backed company called Pure Energy Minerals in hopes of sourcing more home-grown lithium.

But most of the exploration is much more covert, and Perry says a lot of the stakes are by smaller startups.

“It’s very secretive,” he says, “nobody’s sharing anything that they have because they are establishing their land positions at this point in time.”

Buster Hunsaker is a geological consultant in Elko working for some of these lithium startups. He has three clients right now looking at land.

“I mean, I thank Elon Musk for a lot of this because of the faith that the groups that have the belief that the electric car and battery will be there,” he says. “I don’t see the lack of dollars as an issue in this phase right now, there’s a lot of dollars that are coming in right now.”

Whereas most mineral extractions take about seven to 10 years to get through the permitting process, a lithium operation could get up and running in two to three.  

The main question for these companies is how to do it economically.

“Not to be Captain Obvious, but really you’ve got to find the lithium,” says Hunsaker. “A lot of what you’re seeing right now is the exploration stage. Second, where we have found it, and places where it’s been found, is being able to process it.”

In the industry’s favor is that Nevada is home to the only functioning lithium mine in the United States presently. Chemical company Albemarle operates its mine in Silver Peak, which has been producing since the 1960s.

But there are challenges ahead for the nascent industry, including water rights and a tight market for capital investment.

Right now, demand is not outpacing supply, but that hasn’t stopped other top lithium producers in Argentina and Chile from ramping up production