Direct lithium extraction: is the hype justified by the reality?

Salt of the earth: the reality of direct lithium extraction

In 2020, global lithium demand totalled around 383 kt LCE. By 2024, however, this figure had more than tripled to around 1.2 Mt LCE, largely thanks to the electric vehicle (EV) industry. We expect this trend to continue, with lithium consumption projected to reach about 6 Mt LCE by 2050, driven by the evolving landscape of rechargeable batteries.

The lithium industry will see a supply surplus in the short term. However, in the long term, demand growth will outstrip supply growth, and the market will face a shortfall. Additional supply will be needed to meet demand.

Traditionally, lithium is extracted from mineral and brine sources-. However, brine evaporation can take up to 18 months. This makes it a less viable option when it comes to meeting immediate market needs. Exploring new extraction technologies, therefore, is crucial to diversifying sources and reducing market dependence on a few major producers and resource types.

Another disadvantage is the land area needed to create the enormous evaporation ponds. The need for quicker supply to come online and to meet global demand has boosted the rise of direct lithium extraction (DLE) technology.

Speed is of the essence

DLE refers to advanced technologies that efficiently process both continental and dilute brines without needing large evaporation ponds. Using chemical or physical methods, DLE selectively isolates lithium from brine solutions by various methods, including adsorption, ion exchange, solvent extraction and membrane technology.

DLE offers a faster and more efficient alternative to traditional lithium extraction methods. Unlike conventional evaporation processes, which can take months, DLE can achieve extraction in just hours or days. In addition, DLE promises higher recovery rates and a smaller environmental footprint than traditional methods. We estimate that lithium recoveries could increase from 40% to 60% with evaporation ponds to around 70% to 90% with DLE.

In 2023, DLE produced around 83.7 kt of lithium carbonate equivalent (LCE), with output concentrated in Argentina and China. By 2028, we project DLE supply to increase to about 301 kt LCE, which will boost DLE’s market share about 2.6-fold from 2023. More than 30 companies and start-ups worldwide are currently developing DLE technology.

Hurdles to overcome

DLE needs to overcome a number of obstacles if it is to flourish at scale, however.

Cost competitiveness

• DLE currently costs more than traditional lithium extraction methods. Using power from renewable energy could offset some of these. Capital intensities tend to be higher for DLE than traditional extraction and processing methods.
• The economic feasibility and appeal of investing in and operating DLE facilities can be dulled by the instability of the lithium market price. Here, government financial support could reduce the risks and help attract private investment.
• Sales of by-products from the DLE process ‒ metals such as magnesium, potassium, calcium and others ‒ could add further value to the overall DLE process, making it more attractive to investors. Arcadium Lithium, for instance, is already selling by-products such as potassium and bromide.

Scalability

• When it comes to scale, most DLE technologies are still in the nascent or pilot stage and still face technical challenges with a view to large-scale commercialisation. There is limited infrastructure available to support large-scale DLE operations.
• Some oil and gas companies have the kind of infrastructure that could support DLE, but do not necessarily have the requisite lithium present in their resources. What is more, each project requires a unique, tailored DLE process, which will depend on the chemistry of the brine resource.
• On the legislative front, obtaining operational and environmental permits can take time and is complex, possibly causing project delays.

Environmental, social and governance (ESG) issues

• Environmentally, DLE can be a water-intensive process, which can lead to the depletion of local water resources. Lithium brine deposits are commonly found in countries with arid conditions, so this would be a big concern. In Argentina, the Salar del Hombres Muerto uses DLE technologies. Overall freshwater consumption is about 200% higher than the largest salt flat in Chile, the Salar de Atacama.
• The reinjection of brine back into the process reduces net water consumption but that dilutes the brine’s purity. It is worth noting that the reinjection process does not use fresh water.
• Concerns about soil and water contamination could call a halt to operations, depending on the region’s regulatory policy. From an emissions perspective, DLE has a lower carbon footprint than mineral operations but higher than traditional evaporation ponds.

Learn more

Please click here to access the full report; ‘Direct lithium extraction: is the hype justified by the reality?’, or find out more about our Lithium Product Suite.