• Geothermal and oilfield brines ideal for direct lithium extraction tech 
  • Goldman Sachs says DLE tech is a game-changer for the industry
  • O&G giant Exxon is eyeing the tech for an Arkansas oilfield


According to Benchmark Minerals Intelligence, the demand for lithium is forecast to exceed 390kt lithium carbonate equivalent (LCE) in 2025.

It’s expected to grow further to over 900kt LCE in 2030 – compare that with only 10kt of estimated LCE production in 2022.

It’s fair to say the lithium rush is well and truly underway, in the US especially, with the country aggressively supporting the build-out of a domestic battery supply chain and investing millions into the supply chain in an effort to reduce its reliance on China for the battery metals.

Companies in California’s Salton Sea like unlisted player Controlled Thermal Resources plan to produce 60,000 tonnes of lithium from geothermal brines – enough to make roughly 6 million EVs (plus, they already have contracts to supply lithium to General Motors by 2024 and Stellantis by 2025).

The area has been estimated to be capable of producing up to 600,000tpa of lithium carbonate from geothermal fluids (even 40% of the world’s demand according to the California Energy Commission) since lithium rich brine is already being pumped to the surface to power 11 geothermal power plants in the region.

The only difference is they plan to use Direct Lithium Extraction (DLE), to extract the lithium from the brine before reinjecting it underground. 

It offers a fairly more sustainable alternative to hard rock mining or evaporation ponds, but the tech doesn’t just have potential in the Salton Sea, it could also be used literally anywhere there’s a oil & gas wells – and there’s a lot of those in America.

No wonder that big names in O&G like ExxonMobil are apparently getting in on the action, joining the hunt for lithium brines in Arkansas with a $100 million+ deal with Galvanic Energy for drilling and production rights for 120,000 acres of the Smackover formation, according to the Wall Street Journal.



Galvanic reckons the acreage hosts 4 million tonnes of lithium carbonate equivalent (LCE) which could produce enough lithium to power 50 million electric vehicles.

Oh, and independent testing last year has already confirmed the Smackover oilfield brine is compatible with DLE technology.

“The oil and gas industry are eyeing up lithium with the implementation of DLE tech,” Arizona Lithium (ASX:AZL) MD Paul Lloyd said.

“There are so many similarities to the O&G business that it is no surprise that large household names such as Exxon are getting involved in Li and DLE.”


DLE tech is the real game-changer

Even Goldman Sachs is waxing lyrical about the potential of DLE, stating in a report last month that the tech has the potential to significantly increase the supply of lithium from brine projects (much like shale did for oil), nearly doubling lithium production on higher recoveries and improving project returns, “though with the added bonus of offering ESG/sustainability benefits, while also widening rather than steepening the lithium cost curve.”

Lloyd agrees, saying it’s not so much the location of the Salton Sea as the DLE technology that’s really changing the lithium game.

“The Salton Sea is one example of a number of projects in North America that could be taken into production very quickly because of the use of Direct Lithium Extraction (DLE),” he said.

“It is a massive game-changer for the industry and could provide large quantities of US production for the battery plants under construction in the US.”

In March, AZL acquired Prairie Lithium in Canada has a brine resource of 4.1 million tonnes of LCE and the board has some DLE processing technology expertise that AZL expects will expedite the development of the company’s Big Sandy lithium project in Arizona – and they’re already achieving “encouraging results” with the tech on lithium mineralised material from the project.

Here’s what their DLE process looks like.

“AZL is ideally placed to be a major contributor to the growth of lithium production in the US because we have two large scale lithium development projects that are both at the study stage,” Lloyd said.

“We see that DLE will change the lithium industry very quickly and we are primed to be a big part of that change because we have our own proprietary DLE tech and are evaluating many external DLE providers. 

“DLE will enable us to fast-track the Prairie lithium project in Canada and drive down costs at the Big Sandy project in Arizona.”

AZL share price today:


Who has a brine project/DLE tech in the US?

Anson Resources (ASX:ASN)

The company is planning to extract lithium from production wells at the Paradox project in Utah, where it has re-entered historic oil and gas wells to extract lithium rich brines which flow to surface without pumping.

Paradox has a resource of 1Mt lithium carbonate equivalent and 5.27Mt bromine, and a DFS last year projected the production of up to 13,074t of high purity lithium carbonate per annum at an estimated capex of US$495 million, using a proven DLE technology developed with Sunresin New Materials, whose test work has demonstrated lithium recoveries upwards of 91%.

This month the company pegged 586 new claims to increase the project area by 28% to 214km2 of contiguous tenure highly prospective lithium-rich brines. 

The plan going forward is to conduct Western Strategy drilling, re-entering the Mineral Canyon and Sunburst wells with the aim of increasing the existing MRE.

The company also has the Green River lithium project in Utah in its portfolio, which has estimated an Exploration Target of 2 billion tons to 2.6 billion tons of brine, grading 100-150ppm lithium and 2,000–3,000ppm bromine.

Anson just signed a letter of intent to acquire private land for the proposed future mineral extraction and processing plant – which includes water, oil, gas and mineral rights.

The plan is to fund the development of this project from future cash flow generated by the Paradox project – which is targeting production in 2025.


Mandrake Resources (ASX:MAN)

The company’s picked up the 88,096 acre (~356km2) Utah lithium project during the March quarter, which hosts oversaturated brines (40% minerals, 60% water) that were discovered during oil exploration 80 years ago.

Anson’s Paradox project is just 60km up the road, plus developer Galan Lithium (ASX:GLN)  which is developing the Hombre Muerto West lithium brine project in Argentina, has a 5% stake in the company. 

GLN JP Vargas de la Vega says the Utah project’s location is “in an extremely attractive jurisdiction boasting power and water infrastructure in the lithium-hungry United States presented a compelling opportunity for Galan to gain early-stage exposure.”

In such a prolific oil and gas producing area with hundreds of active, suspended and abandoned wells, there’s the potential to access and sample these brines from existing wells for less than US$300k per well.

Compare that to US$3m+ to drill a new one, and that’s quite the cost saving.

Mandrake has identified six re-entry candidate wells with “high geological potential to host lithium-rich brines” with sampling planned in the near-term with the goal of delineating a JORC exploration target.

The company also plans to investigate suitable DLE and DLE/evaporative pond hybrid technologies with potential development partners. 


Reedy Lagoon (ASX:RLC)

Reedy Lagoon holds two lithium brine projects located in Nevada, Alkali Lake North and Clayton Valley, both of which are located in large and separate ground water catchment areas. 

The projects are in a great location; within 30km of the Silver Peak Lithium brine operation owned by Albemarle Corp and the direct extraction pilot plant operated by Schlumberger under a joint venture with Pure Energy – which are located 360km from the Tesla Gigafactory in Reno. 

During the March quarter, RLC increased its tenure for Alkali Lake by by staking 158 lode claims covering areas adjoining the project and increasing the project area by 1,312ha.

Interestingly, unlike Mandrake above, MD Geof Fethers says they’re looking for lithium in clay, not brines, in the new tenure because it’s quicker and cheaper to find. 

“The Alkali Lake North project remains prospective for lithium in brine, but exploration for lithium-rich clay is significantly quicker and less costly than exploration for lithium in brine,” he said.


Morella Corp (ASX:1MC)

Another Nevada play, the company has the Fish Lake Valley and North Big Smoky lithium brines projects (60% earning in with Lithium Corporation (OTCBB:LTUM)), where exploration work is currently being planned.

At Fish Valley a reflective seismic survey will be carried out on the southern project area, and the company has submitted a notice for drilling in the north project area – with a determination from the Bureau of Land Management (BLM) expected shortly.

At North Big Smokey, auger drilling last year showed elevated lithium assays up to 499ppm with over 40% of the assays with grades of 200ppm lithium or more. Nearly 90% of the deposit shows lithium grades greater than 100ppm. 

The company recently completed passive seismic surveys and magnetotelluric work at the Carvers and Austin areas, flagging a potential new brine target at Austin.

Plus, 1MC has already demonstrated their own DLE tech, announcing back in October last year that ion exchange media had proved highly efficient for lithium extraction from brine at Fish Lake Valley, with planning for a pilot-scale development being considered.


ASN, MAN, RLC and 1MC share prices today:


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