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TL:DR
Direct Lithium Extraction (DLE) represents a promising, sustainable alternative to traditional lithium mining methods, offering faster development, lower environmental impact, and reduced costs—if it can overcome scalability challenges. Companies like EMP Metals leverage high-quality brines and favorable infrastructure in Saskatchewan to advance DLE projects, focusing on smaller-scale operations to minimize costs and risks. However, brine variability and technical hurdles in scaling DLE remain significant barriers, requiring customized processes and extensive investment in testing. With major players like ExxonMobil entering the space and advancements expected in the next 12-18 months, proving DLE’s commercial viability is crucial for it to disrupt the lithium market and meet growing demand from EVs and energy storage solutions.
5 Takeaways
- 1. DLE offers a more sustainable and efficient alternative to traditional lithium mining methods, but scaling it to commercial levels remains a significant challenge.
- 2. Major oil and gas companies entering the DLE space bring expertise and resources that could accelerate commercialization, but smaller companies like EMP Metals retain an edge in agility and innovation.
- 3. The variability in brine composition necessitates customized extraction processes, making brine quality and pre-treatment critical for DLE success.
- 4. EMP Metals’ Saskatchewan-based brine projects benefit from lower costs and favorable local infrastructure, positioning them competitively despite the industry’s high development expenses.
- 5. Proving DLE at commercial scale within the next 12 to 18 months is essential to building confidence in the technology and unlocking its full potential for the lithium market.
Do We Even Need Direct Lithium Extraction (DLE)?
The lithium market appears oversupplied. UBS recently projected that rising output from new and expanded mines will keep the market in surplus through 2027. With this in mind, is DLE necessary, or can the industry meet demand with traditional methods?
Paul Schubach, COO of EMP Metals, argues that DLE offers advantages beyond just boosting supply. “It’s about efficiency, sustainability, and speed,” he said. DLE eliminates surface tailings, reduces greenhouse gas emissions, and can bring brine-based lithium resources online more quickly than hard rock mines or evaporation ponds.
Schubach pointed out that while demand for lithium has softened in recent months, long-term trends—driven by electric vehicles (EVs) and energy storage—suggest continued growth. “EV adoption is not slowing down,” he added. “We need innovations like DLE to support future demand sustainably.”
How Does DLE Compare to Traditional Methods?
Traditional lithium extraction, whether through hard rock mining or evaporation ponds, is time- and resource-intensive. Hard rock operations often take years to develop and involve significant environmental challenges.
“DLE provides an alternative,” Schubach explained. “It offers lower costs, faster development, and avoids the use of surface ponds or large-scale tailings storage.” However, he acknowledged a major caveat: “DLE still needs to prove itself at a commercial scale.”
What Are the Challenges of Scaling DLE?
While DLE shows promise in laboratory environments, scaling it up has proven difficult. Many companies struggle to replicate small-scale success in commercial operations. Schubach emphasized that the challenge isn’t whether DLE can succeed but when.
“We’re starting to see major players like ExxonMobil and Equinor invest in DLE,” he said, citing Exxon’s acquisition of the Galvanic project in Arkansas. “Their expertise in fluid handling and drilling could accelerate commercialization.”
Yet challenges remain, particularly around flow rates and brine variability. “Higher flow rates introduce complexities that require significant technical innovation,” Schubach admitted.
Can Smaller Companies Compete with Oil and Gas Giants?
Major oil companies entering the DLE space bring deep pockets, technical expertise, and established infrastructure. This raises questions about the role of smaller companies.
Schubach believes there’s room for both. “Smaller companies like EMP Metals can be more nimble and adaptive,” he explained. “We can pivot and test new approaches quickly, which larger organizations often struggle with.”
EMP’s strategy focuses on developing smaller-scale projects—producing 1,500 to 3,000 tons of lithium annually. “These lower-capex projects are manageable for a company of our size and can still deliver meaningful production,” he said.
How Does Brine Composition Affect DLE Scalability?
Not all brines are created equal. Schubach noted that brine composition varies significantly based on location, geology, and other factors, complicating the standardization of DLE processes.
“Every brine resource is unique,” he said. “Matching the technology to the specific impurities and pre-treatment requirements is critical.” He highlighted Saskatchewan’s brine as a competitive advantage for EMP Metals, citing the absence of H₂S and hydrocarbons, which reduce treatment costs.
What Happens to Contaminants and Waste During the DLE Process?
DLE extracts lithium from brine while rejecting impurities, but what happens to the leftover waste? Schubach explained that most impurities remain in the brine, which is reinjected into underground disposal zones.
“The contaminants don’t stay on the surface,” he said. “Any solids generated are sent to conventional landfills.” He emphasized that Saskatchewan’s oil and gas industry has safely handled similar disposal processes for decades.
Are Hard Rock Lithium Deposits Easier to Develop?
Hard rock lithium deposits are often considered more predictable than brine-based resources, but Schubach pushed back on this assumption. EMP Metals has drilled and tested 10 wells across its Saskatchewan land package to better understand variability.
“We’ve built a substantial database to provide confidence in our resource,” he said. While variability exists, he argued that robust geological data and modern flow-testing techniques can mitigate risks.
How Costly Is It to Build a DLE Resource?
Developing a DLE resource to an NI 43-101-compliant standard requires significant investment. EMP has already spent millions on drilling, piloting, and technical studies, Schubach said.
“The cost of confidence is high,” he admitted. However, Saskatchewan’s smaller-scale projects offer a strategic advantage. “Instead of billion-dollar investments, we’re talking hundreds of millions for initial production facilities,” he noted.
Can DLE Compete on Cost With Evaporation Ponds?
Evaporation ponds, particularly in South America, offer some of the lowest operating costs in the industry. How does DLE measure up?
According to EMP Metals’ preliminary economic assessment (PEA), the company’s Opex sits at around $3,300 per ton—competitive by global standards. Schubach credits Saskatchewan’s high-quality brine and streamlined processes for keeping costs low.
How Close Is DLE to Achieving Commercial-Scale Success?
The lithium industry is waiting for DLE to prove itself at scale. Schubach believes significant advancements will happen within 12 to 18 months, as demonstration plants come online and large-scale projects like Standard Lithium’s operation in Arkansas progress.
“This is the critical question,” he said. “Once someone demonstrates DLE at full scale, it will unlock a wave of confidence across the industry.”
Final Thoughts
The conversation with Schubach highlighted both the promise and the hurdles of direct lithium extraction. While DLE holds potential for more sustainable and efficient lithium production, scaling the technology remains a formidable challenge.
Still, Schubach remains optimistic about EMP Metals’ role in advancing the industry. “Saskatchewan’s brine quality and infrastructure give us a competitive edge,” he concluded. “We’re positioned to be a key player in the global lithium market.”
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