$160 Million Bet: Why Big Oil is Backing This Lithium Extraction Method

Learn how EMP Metals is leveraging the same technology to potentially become North America's lowest-cost lithium producer 

Did you know that lithium carbonate, a compound most people rarely think about, is quietly becoming the linchpin of our clean energy future? By 2040, experts project lithium carbonate demand will surge 40 times over[1]. That's not a typo - forty times.

Potential $700 Billion Market  

With lithium carbonate currently selling for around $14,000 per tonne[6], that future demand could represent a market worth over $700 billion annually. In the commodity business, the lowest cost producer wins. This reality sets the stage for a high-stakes race in the lithium industry.

Picture this: streets filled with silent, zero-emission vehicles. Homes and businesses powered by an intricate dance of electric cars, smart devices, and massive battery banks storing energy from solar, wind, and hydroelectric sources. It's not science fiction; it's where we're heading.

But there's a snag in this green dream, and it's not just about how we get lithium carbonate out of the ground - it's about where we get it from. North America, despite its ambitious clean energy goals, has a glaring weakness: it lacks a reliable domestic lithium supply. In 2022, the U.S. produced less than 1% of the world's lithium[7], leaving it heavily dependent on imports for this critical resource. This vulnerability in the supply chain is a threat to the United States.

379 Olympic Swimming Pools Of Water For Every 1000 tons of Lithium Carbonate  

So, how do we currently get lithium carbonate?

Let's talk traditional methods. Hard rock mining is a beast. For every 1,000 metric tons of lithium carbonate, it gulps down 250 million gallons of water[2]. That's like draining 379 Olympic-sized swimming pools. Oh, and it belches out 15 million kg of CO2 while it's at it[2]. Not exactly eco-friendly, is it?

And at $6,900 per metric ton[2], it's not winning any awards for cost-effectiveness either.

Greenbushes Mine, Australia, the largest open pit lithium mining operation in the world

What about solar brine evaporation?    

Well, it's like watching paint dry in slow motion. We're talking up to 15 years from project start to actual production[2]. And once running it can take 2 to 3 years to produce a saleable product!

And water use? It's even thirstier than hard rock mining, guzzling 550 million gallons for every 1,000 metric tons of lithium carbonate[2]. At $5,800 per metric ton[2], it's cheaper, but at what cost to our water resources? 

Without scarce water rights and permits, brine evaporation based lithium producers are crippled, adding a high amount of risk.

The Atacama Salar in Chile, is the World's highest grade and largest producing lithium brine deposit  

What’s Got An Oil Major Interested?    

Now, let's shift gears to Direct Lithium Extraction, or DLE. This method can pull lithium out of the ground in hours, not years. It sips water compared to the others - just 80 million gallons per 1,000 metric tons[2]. And CO2 emissions? Slashed by 70% compared to hard rock mining[2]. At $5,700 per metric ton[2], it's not just greener, it's easier on the wallet too.

And it's not just small players betting on DLE. Equinor, the Norwegian energy giant with a market cap of over $100 billion and operations in 30 countries, is diving headfirst into the lithium space[10]. 

This company, which produces about 2% of the world's hydrocarbons daily, sees DLE as the future of lithium production. They've committed up to $160 million in a partnership with Standard Lithium, focusing on DLE projects in Arkansas and Texas[11]. When a company of Equinor's size and expertise makes a move like this, it's a strong vote of confidence in the technology.

But here's the kicker — DLE isn't a one-size-fits-all solution. It's picky about its dinner. The quality of the brine — that's the salty water lithium comes from — makes all the difference. Ideal brines have high lithium concentrations, low levels of impurities like magnesium and calcium, and the right temperature and pressure conditions[3].

This is where things get interesting. 

Tucked away in Saskatchewan, there's a company called EMP Metals [CSE:EMPS | OTCQB:EMPPF] sitting on what could be lithium's equivalent of prime real estate. Their brine resources in the Duperow formation are showing lithium concentrations up to 259 mg/L[4].  This is the highest lithium-brine concentration ever recorded in Canada to-date. For context, the famed Lithium Triangle in Argentina averages 213 mg/L[5].

PEA operating cost of $3,319 per ton   

But it's not just about high concentrations - EMP Metals is on the fast track to production. 

Their recent pilot plant success demonstrated the viability of their DLE process, achieving lithium recovery rates of over 90%[8]. What's more, their preliminary economic assessment (PEA) estimates an operating cost of just $3,319 per ton of lithium carbonate[9]. That's less than a quarter of the current market price, potentially positioning EMP Metals as one of the lowest-cost producers globally.

The numbers get even more eye-popping when you look at the project economics. With an estimated pre-tax Net Present Value of US$1.49 billion and an Internal Rate of Return of 55%[9], EMP Metals' project stands out as a potentially highly profitable venture in the lithium space.

Now, let's add some icing to this cake. Saskatchewan isn't just any old place. It's mining-friendly territory with top-notch infrastructure. You don't have to worry about your lithium getting stuck in a port halfway around the world or navigate tricky geopolitics. This could be the key to establishing a robust, domestic lithium supply for North America.

EMP Metals [CSE:EMPS | OTCQB:EMPPF] is pushing forward, aiming to turn this high-grade brine into the lithium carbonate our green future is thirsting for. They're at that sweet spot where cutting-edge tech meets prime resources.

Here's a thought to chew on: as the world scrambles for lithium carbonate, who do you think will have the edge? The ones stuck with old, slow, resource-heavy methods? Or the nimble players with high-grade resources perfectly suited for the new extraction tech on the block?

The lithium story is just starting to unfold. As it does, companies like EMP Metals [CSE:EMPS | OTCQB:EMPPF] might find themselves in an enviable position. After all, in a world hungry for lithium carbonate, the lowest-cost, highest-grade producers often end up wearing the crown.

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