Lake Resources’ (ASX: LKE) technology partner Lilac Solutions has announced a new round of capital raising to push its lithium extraction technology for the mining and automotive industries.
California-based Lilac Solutions will embark on a US$150 million Series B raising to investors including Lowercarbon Capital and T Rowe Price to advance its alternative and more sustainable method of directly extracting lithium using ion exchange technology.
Unlike traditional processes, Lilac’s technology does not require evaporation, consumes less water and has a smaller environmental footprint.
Lilac has proven the technology on a variety of brines and recently completed its first field pilot, setting a new standard for rapid deployment and process performance.
It is believed to hold significant promise for unlocking latent lithium resources which are currently too low-grade to be conventionally harvested.
Lilac chief executive officer Dave Snydacker said the technology could remove a bottleneck from the lithium raw materials industry.
“The lithium industry has been plagued by technical and environmental problems that have put the energy transition in jeopardy,” he said.
“[Our] technology solves these problems and will finally enable lithium production at a scale demanded [by the market].”
He said funds from the capital raising would be used to ramp up production of Lilac’s ion exchange beads, expand its teams of engineers and field operators, and deploy the technology globally.
Ion exchange beads can be reused hundreds of times before they need to be replaced at which point they are returned to the factory to be melted down and re-made into new beads.
“Many [companies] have tried to do this but for the first time, [we] have developed a bead that has the right chemical properties for commercial lithium production,” Mr Snydacker said.
The lithium technology will also be utilised at an on-site demonstration plant at Kachi, following a technology and funding partnership signed earlier this week between Lake and Lilac.
Under the terms of the agreement, Lilac stands to earn a maximum 25% equity stake in Kachi by providing the technology and engineering teams to help advance the project.
Once the earn-in is complete, Lilac will contribute approximately US$50 million (A$70 million) in pro-rata future development costs.
“With Lilac’s technology, Kachi will efficiently deliver the large volumes of high-quality lithium chemicals needed by battery makers,” Mr Snydacker said.
“We have worked extensively with [Kachi’s] brine, generating the data needed for engineering studies, and it is a fantastic fit for our technology.”
Lake said Lilac’s innovative and efficient direct extraction method would set a new industry standard for environment-friendly production methods.
The Kachi project will target the production of 25,500 tonnes of lithium carbonate equivalent per year.
Project commissioning and first production is expected in 2024.
Lithium is fast becoming one of the world’s most in-demand metals and accounts for 5% of the cost of an electric vehicle’s lithium-ion battery.
Research by Benchmark Mineral Intelligence predicts a lithium shortage in 2025 that equates to 189,000t.
This compares to the entire lithium market size in 2015, which was around 177,000t.