Lilac raises $145 million for US lithium project

Despite a crash in lithium prices that has caused some firms to hit the brakes on new mines and processing facilities, Lilac Solutions has succeeded in raising $145 million from Breakthrough Energy Ventures and other investors to develop a lithium extraction project on Utah’s Great Salt Lake and to scale up at other sites.

Lilac uses ion-exchange beads to selectively remove lithium compounds from salty brines. The company says its technology can extract much more lithium than conventional brine-based processes, which use evaporation ponds to produce a concentrated, lithium-rich liquid.

Lilac already has a demonstration facility at Lake Resources’ brine operation in Argentina and hopes to set up a pilot plant in Utah this year. The firm aims to produce 3,000 metric tons per year of lithium chemicals at the site by 2026.

The Great Salt Lake has lower lithium concentrations than many brines in Argentina and Chile, so conventional evaporation ponds wouldn’t work, according to Lilac CEO David Snydacker. He says that satisfying the battery industry’s growing demand for lithium will require exploiting lower-quality brines and that direct lithium extraction (DLE) processes like Lilac’s will help make that possible. “We will see very few new evaporation ponds built for lithium production,” Snydacker says. “This technology is essential.”

Lilac’s progress comes as other companies are struggling to advance new projects given the roughly 80% drop in lithium prices over the past year. Albemarle is laying off workers and says it will delay a large lithium processing facility in South Carolina. Liontown Resources is postponing an expansion of its hard rock mine in Australia, and Sayona Mining may slow operations at a mine in Quebec. Earlier this month, Compass Minerals said it would abandon its plan for a lithium operation on the Great Salt Lake because of regulatory issues and low prices.

Companies developing DLE technology—like Lilac—are somewhat insulated from today’s low lithium prices compared with conventional miners that are close to start up or already operating, according to Andy Leyland, managing director of the battery supply chain consultancy SC Insights. That’s because they are focused on boosting lithium production in the future, when demand is expected to outstrip supply. Lake Resources, for example, doesn’t expect to start producing lithium using Lilac’s technology until 2027.

“The long-term demand story is still very good,” Leyland says. “We still need new supply, which means we still need new technology providers.”

While DLE firms may be protected from falling lithium prices, Chris Berry, president of the lithium consulting firm House Mountain Partners, warns that they are exposed to the risk of technology failure. Technologies that look promising in a lab or pilot plant can be difficult to scale up. “There’s lots of stuff you can do in a lab,” he says. “When you’re out in the bush in Argentina, it’s a different story.