The DLE trade is predicted to develop to greater than $10 billion in annual income throughout the subsequent decade by supplying lithium for EV batteries in hours or days, not months or longer as with current giant, water-intensive evaporation ponds and open pit mines.
Whereas DLE applied sciences fluctuate, they’re corresponding to filtration utilized by frequent family water softeners and goal to extract about 90% or extra of the lithium from brines, in comparison with about 50% utilizing ponds.
Nobody has launched a industrial DLE operation with out ponds, though a number of corporations are racing to be first.
Arcadium, by way of a predecessor firm, was the primary to develop an early model of a DLE know-how within the Nineteen Nineties at an Argentina lithium brine web site that’s nonetheless operational right this moment.
Whereas that web site makes use of ponds in tandem with DLE, Arcadium’s decades-long expertise with the know-how makes it a tantalizing prize for Rio because it goals to develop lithium deposits in Chile, the place officers are phasing out ponds and requiring DLE, and elsewhere.
“It (DLE) is definitely the answer to offer the lithium that the world wants,” Rio CEO Jakob Stausholm instructed traders on Wednesday after saying the all-cash deal. It values Arcadium at a 90% premium to its share value earlier than Reuters first reported the businesses have been in talks final Friday.
Arcadium’s Argentina DLE operations are positioned close to a DLE challenge that Rio paid $825 million for in 2022, although that challenge has but to provide lithium. Arcadium’s engineers have already met with Rio’s DLE group, Stausholm mentioned.
“There’s rather a lot forward of us and we haven’t explored it absolutely, but it’s the proper know-how,” he mentioned.
Although Rio has lengthy been a pacesetter in arduous rock mining, it has far much less experience within the chemical processing on the core of lithium manufacturing.
DLE, for instance, is only one a part of a fancy course of that may contain greater than 20 steps, together with pre-treatment of a lithium brine and crystallization.
Every brine deposit may have completely different chemical compositions – together with numerous ranges of calcium, magnesium and different metals – that have to be rigorously analyzed. All of these steps have been studied in depth for years by Arcadium.
“The important thing to unlocking preliminary implementation of DLE tends to be that know-how plus infrastructure,” Arcadium CEO Paul Graves instructed traders on Wednesday. “However after getting unlocked it, it’s extremely shortly replicable.”
Arcadium, by way of a predecessor firm, additionally holds a stake in a subsidiary of EnergySource Minerals, a DLE developer that licenses lithium know-how to SLB and others. When that funding was introduced final December, executives mentioned it might begin industrial manufacturing by 2025.
Samuel Moore, CEO of the EnergySource subsidiary ILiAD Applied sciences, mentioned in a press release that his firm has loved a “robust working relationship with Arcadium” and appears ahead to working with Rio.
“Rio Tinto is paying a premium for Arcadium partially for its mental property round DLE know-how,” mentioned Chris Berry, an impartial lithium trade advisor.
DLE rivals
Rio’s bid to make DLE mainstream will face intense competitors, together with from among the very individuals who helped make Arcadium a DLE chief.
Arcadium’s Argentina DLE web site, for instance, was developed by a scientist who’s now chairman of Worldwide Battery Metals, which has developed a modular DLE facility that Exxon, Chevron and others have thought-about licensing.
Albemarle, the world’s largest lithium producer, can be testing DLE in Arkansas close to its current bromine operations and in Chile. SQM, which is headquartered in Santiago, agreed with Chile’s authorities this yr to a plan that can see its manufacturing improve partially because of DLE.
“DLE is about being a chemical processing professional. Corporations like Arcadium, Albemarle, SQM, they’ve quite a lot of experience that they’ll put to work in that space,” Eric Norris, head of Albemarle’s vitality storage enterprise and a former government at an Arcadium predecessor firm, instructed Reuters earlier this yr.
Vulcan Vitality, privately held EnergyX, Commonplace Lithium and others are additionally advancing their very own variations of DLE applied sciences.
(By Ernest Scheyder and Clara Denina; Modifying by Veronica Brown and Jamie Freed)