Situated in a 19,305 sq miles (5 million hectares) area in Alberta, Canada, nine operators could be poised to prosper from the so-called “white gold” rush through a process known as direct lithium extraction (DLE).
Service and oil companies looking to get in on the action—by tapping wastewater for lithium brine—could unlock another revenue stream, according to a recent analysis by Enverus on lithium resources in the Canadian province.
Rising demand is “sparking a land grab in Alberta and a renaissance in prospecting, this time for lithium rather than oil,” according to Graham Bain, report author and a vice president at Enverus Intelligence Research.
The global push to lower emissions has led to higher demand for lithium, a critical metal and key ingredient for rechargeable batteries used to power items such as laptops and cell phones—and most notable for the energy transition—electric vehicles (EVs) and energy storage.
Lithium is expected to play a key role in the energy transition, including in the U.S. as the country embarks on a mission to boost domestic supplies of lithium and reduce its dependence on China. The International Energy Agency forecasts lithium demand will surge by as much as 40 times by 2040, having already tripled between 2017 and 2022.
Driven by a growing battery market for EVs and energy storage, Enverus said lithium spot prices have jumped nearly eightfold since 2020 to $55,000 per tonne of lithium carbonate equivalent (LCE).
“Contenders looking to capitalize on the opportunity are turning to direct lithium extraction, a short-cycle method of lithium production capable of extracting the resource from low-concentration lithium brines,” Enverus said in a report. “Lithium operators are targeting Devonian-aged carbonates, with production rates as high as 15,000 bbl/d and lithium concentrations peaking at about 140 ppm [parts per million].”
Unlike lithium mined from rock in open pits, DLE is seen as a more environmentally friendly way of extracting lithium from brine using chemical processes such as ion exchange, solvent extraction or adsorption.
Lithium concentration, flow rates
The economics of DLE and ultimately, success, of projects pursued in Alberta come down to lithium concentration and flow rate, Bain said.
Some areas have higher lithium concentrations than others. Higher lithium concentration or flow rate lowers the number of wells required to produce lithium, reducing overall project costs, the report states.
“Alberta’s lithium concentration ranges from about 140 parts per million to below 40, and that’s important because that’s directly related to how much water you need to produce to extract a certain amount of lithium,” Bain told Hart Energy. “The second component to it is flowrate. These wells will have to flow a lot of water. If they can’t, then you’re going to need a lot of wells to do it.”
Using E3 Lithium’s 20,000 tonnes-per-year project as an example, Bain said the company would likely need 75 production wells in the best-case scenario or nearly 400 in the worst case based on Enverus’ analysis of maximum flow rates and single wells.
“It’s important to note that production wells are only half the story,” the report states. “Water will need to be reinjected back into the reservoir to dispose of the lithium-depleted brine and to maintain reservoir pressure.”
Enverus analysis shows projects will need 10% to 20% of the number of producing wells for injection. Plus, projects will need access to facilities capable of handling large volumes of water.
Chasing the prize
With the exception of Teck Resources Ltd., the largest diversified mining company in Canada, most of the companies that have amassed acreage and mineral permits in Alberta are either small private or public companies with low market caps, Bain said, noting the acreage is likely intended for DLE.
Operators with the most amount of acreage by lithium concentration based on Enverus data are Calgary-based Highwood Asset Management Ltd. (formerly Highwood Oil Co. Ltd.), Vancouver-based LithiumBank Resources Corp. and Calgary-based NeoLithica and E3 Lithium. The companies have between 500,000 hectares and 1.5 million hectares under lease, according to the report.
Several of the nine companies are already in pursuit of lithium, putting technology to work.
LithiumBank on Sept. 11 said it entered an intellectual property agreement with Go2Lithium Inc.’s subsidiary G2L Greenview Resources for DLE technology to extract lithium salts from enriched brines present at LithiumBank’s development projects, including the Boardwalk lithium brine project at the Sturgeon Lake oil and gas field in Alberta.
Calgary-based E3 Lithium is putting DLE to the test with ion-exchange technology that utilizes a proprietary sorbent. E3 said in late August it started operations at its DLE field pilot plant as the company moves its Alberta lithium asset toward commercialization.
Companies with an abundance of wastewater could also benefit from the white gold rush.
“Instead of building entirely new infrastructure, operators with condensed positions, infrastructure in place and high volumes of water production could pose an opportunity for wastewater processing and lithium extraction at the same time,” the report states. “This will reduce project capital and operating costs, allowing for the economic extraction of lithium from brines at a lower concentration.”
Enverus identified a Canadian oil and gas company producing about 7,000 boe/d and 13.7 MMbbl of water per month from one field. The company might be able to monetize wastewater, bringing in annual revenue of about $383 million if wastewater from the field produced about 6,960 tonnes of LCE per year at a 50-ppm lithium concentration.
The oil company could partner with a services company willing to pay for the wastewater and handle the lithium extraction, Bain said.
“These companies are essentially producing all this water and they have to pay to re-inject it,” he said. “So, if there’s some way to monetize that, it’s an interesting strategy.”
Enverus’ analysis showed Alberta’s top 10 companies produced a collective 74 MMbbl of water monthly. Assuming an LCE spot price of $55,000 per tonne, that’s a “wasted opportunity of 17,000 tonnes/year of LCE and nearly $1 billion in revenue,” according to the report.
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