E3 Lithium’s Field Pilot Plant Site as of August 28, 2023. Source: E3 Lithium
E3 Lithium (TSXV:ETL) has begun operations at its Direct Lithium Extraction (DLE) facility in Alberta. This marks the province’s inaugural plant dedicated to testing this alternate method for lithium extraction from brine projects.
Chris Doornbos, President and CEO of E3 Lithium, commented in a press release: “The start of full operations is a testament to the hard work the team has been putting in to get this equipment running. This is a foundational moment for E3 Lithium, as demonstrating DLE at pilot scale will enable us to move forward in developing this lithium asset in Alberta towards commercialization.”
Goldman Sachs analysts have previously pointed to the potential of DLE technology to revolutionize the industry. Similar to how shale transformed the oil market, DLE may allow companies to nearly double their lithium yield from evaporation ponds.
The primary objective of E3 Lithium’s operations is to assess specific parameters believed to yield optimal results for extracting lithium from brines. Subsequent to initial testing, the system will operate for extended periods to validate its performance and generate increased volumes of lithium concentrate. This concentrate will then undergo refinement into market-ready products, notably lithium hydroxide.
DLE distinguishes itself from traditional methods. Instead of evaporating brine in large pools to concentrate lithium, DLE processes the brine directly in a plant. Here, a series of chemical reactions segregate the lithium, which is then reintroduced underground. This method yields battery-grade lithium carbonate or hydroxide in mere hours, a stark contrast to the traditional 18-month timeframe. Thereis also no requirement to ship concentrates to a different location for processing.
The plant currently processes brine from E3 Lithium’s Clearwater project. A 2020 preliminary economic evaluation anticipates this project to produce 20,000 tonnes of lithium hydroxide annually over two decades. The after-tax net present value, with an 8% discount, is approximately $820 million and boasts an internal rate of return of 27%.
With one of the most substantial inferred lithium resources in its category, E3 holds 16 million tonnes of lithium carbonate equivalent (LCE) in the Measured and Indicated sector. Additionally, there’s 0.9 million tonnes LCE of Inferred mineral resources located in the Leduc Aquifer. The Clearwater project, with 2.2 million tonnes of LCE at an average concentration of 74 mg/L, forms part of this resource.
According to Benchmark Mineral Intelligence, DLE lithium production is set to surge from around 54,000 tonnes currently to an impressive 647,500 tonnes by 2032.
The commissioning process for E3 Lithium’s plant involved integrating all main equipment pieces with the onsite piping and wiring systems. Comprehensive inspections and tests were performed, confirming the DLE system’s operation as projected based on established pre-pilot performance metrics.
The pilot operations, which began with an exploration of different DLE process settings to identify the most efficient lithium extraction method, will be instrumental in shaping the commercial design of the processing facility in future studies.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.