An Australian start-up, backed by mining giant Rio Tinto (ASX:RIO), is raising funds to develop a lithium extraction technology that could unlock new reserves of this essential battery component and reduce global reliance on China for refining the commodity.
ElectraLith, a spin-off from Melbourne’s Monash University, has successfully produced battery-grade lithium hydroxide from various raw lithium types. After securing investments from Rio
Tinto and Britain’s IP Group, the company plans to raise $15 million to build its first facility for further development and commercialization of the technology.
The start-up is among a select group of companies working on “direct lithium extraction” (DLE) technology, which has the potential to significantly reduce lithium mining costs and access previously unviable deposits. According to a Goldman Sachs research note from last year, the successful deployment of DLE could double lithium production, akin to the impact of shale technology on the oil sector.
ElectraLith distinguishes itself from competitors by also refining lithium through a process called DLE-R. This method uses electrodialysis to filter brine containing lithium through a membrane, creating lithium chloride. A second membrane further purifies it into lithium hydroxide, a refined product used in electric vehicle batteries.
Charlie McGill, CEO of ElectraLith, highlighted the benefits of refining lithium into hydroxide for countries like the US and Australia, which are developing critical minerals policies to reduce dependence on China. “Onshoring the refining process could significantly impact the US,” he said. “We can take brines directly to Tesla and the US government with no China involvement.”
China currently dominates lithium refining, holding a 65 percent global market share, according to Benchmark Mineral Intelligence.
Mike Molinari, IP Group’s managing director in Australia, noted that reducing costs, increasing production, and navigating geopolitics are crucial for the critical minerals sector. He emphasized that technology addressing these issues is well-positioned to succeed, particularly in the lithium market, where demand is expected to outpace supply. “The vast majority of capacity is in China, and that’s become problematic,” he said. “This could reduce dependence on critical resources from governments you’re not aligned with.”
ElectraLith’s testing demonstrated its ability to refine lithium without water or chemicals, setting it apart from traditional evaporation methods that consume large amounts of water and from other DLE processes. McGill mentioned that proof of concept showed successful hydroxide production from very low-quality brine sourced from Utah.
Despite ongoing skepticism about DLE, a technology in development since the 1970s and commercially implemented in only a few projects globally, McGill acknowledged the company’s long journey ahead. However, he noted that Rio Tinto’s backing is significant, with large oil and gas companies and government departments expressing interest in the new funding round.
Travis Baroni, chief adviser at Rio Tinto’s battery minerals unit and a board member of ElectraLith, said the technology has “real potential to significantly reduce the economic and environmental costs of lithium production.”