David and Stephen talk lithium extraction technology and Lake’s Kachi project being a Global Top 10 lithium brine resource
David Snydacker, CEO, Lilac Solutions
Dave is a materials engineer, a chemist, and an expert in battery technology. He holds a PhD from Northwestern University and a BA from Wesleyan University.
Stephen Promnitz, Managing Director, Lake Resources
Stephen Promnitz joined Lake as Managing Director in November 2016, bringing to bear his broad perspective and experience of the mining industry from exploration to production with a focus on South America in particular.
Hi Steve and David, thanks for taking the time to chat with us today.
1. David, could you give us a little background about Lilac Solutions and what it is that you do?
Lilac Solutions is a lithium extraction company based in Oakland, California. Lilac offers a full-service ion exchange technology for lithium extraction from brine resources that is cheap, fast, effective, environmentally friendly, and adaptable to a wide variety of brine chemistries. A significant financial an environmental benefit comes from the removal of evaporation ponds, which reduces the footprint of the operation. Further, the method allows for the remaining brine to be reinjected into the same aquifer from where it is sourced.
2. Steve, could you give us a quick intro into Lake Resources? What is your relationship with Lilac Solutions?
Lake Resources (ASX:LKE) (To see Lake Resources Full Profile, go to page 48-49) is located in the heart of “the lithium triangle” with four significant projects alongside current lithium producers. Lake is moving to pre-production of high-purity lithium products from 100 percent-owned large lithium brine projects in Argentina, using a new, efficient, and disruptive low-cost direct extraction technology in partnership with Lilac. A pilot plant is being constructed in California and will be tested prior to transport and operation on site in Lake’s Kachi Lithium Brine project in Argentina. First samples should be available to downstream participants in early 2020, which will probably lead to offtake agreements, detailed studies, and production from a planned large 25,000tpa LCE production plant.
3. David, how is Lilac’s ion exchange technology different to other lithium extraction processes?
The key differences are the ability to produce a premium product with very low impurities, and the end product being either lithium carbonate and/or lithium hydroxide. This is all from a fairly simple ion exchange process that delivers high recoveries with a fast start-up time versus years of making evaporation ponds work properly.
4. Is this technology proprietary to Lilac? If so, how are companies able to use it?
Lilac deploys unique technology around the ion exchange beads (resin). That’s Lilac’s unique IP. Although ion exchange methods have been around for more than 50 years, they haven’t been used in an efficient way on lithium brines. Lilac has produced a highly selective and durable ion exchange bead, and is currently in talks with a number of companies regardinusing this technology. Also, we are in a partnership with Lake Resources, hoping to transform lithium production in Argentina with exclusivity over key geographies. Lilac is also working confidentially with oil and gas producers in the USA, among others.
5. Steve, how does a company like Lake benefit from using such a technology and where are you currently using it on your projects? What kind of results are you seeing as a result of using Lilac’s ion exchange technology?
Lilac has delivered a high purity product which, based on our discussions with battery/cathode makers, will be in high demand and achieve premium pricing. The process is modular, which will ensure that battery makers can scale up production to suit demand knowing that high quality, consistent supply can be scaled up by Lake to meet their demand. Recent lithium brine evaporation projects in Chile and Argentina have struggled initially to optimise production to generate a battery grade product, often with issues around boron impurities. This is similar to the impurities that have plagued hard rock brine projects. These problems are avoided with the Lilac process. Also, the process allows Lake to produce products which suit the end user, with flexibility on lithium carbonate or hydroxide or intermediate products.
Lilac has demonstrated an efficient process of lithium extraction over nine months of lab testing of Lake’s brines from Kachi. Recoveries of over 80 percent have been achieved (versus 50 percent of evaporation) with very low impurities because the process just takes the lithium out, allowing the rest of the salty water (about 99 percent) to be returned to the aquifer that it comes from.
6. Steve, the time scale of the process (from pilot plant construction to production of lithium concentrate) for Lake?
First samples from the pilot plant are expected to be delivered to a number of downstream participants in March/ April next year. The demonstration will hopefully lead to detailed studies and approval for a large 25,000tpa LCE production plant in 2022, depending on the financing, with production costs at the lowest part of the industry’s cost curve. A PFS (pre-feasibility study) supporting this approach is about to be released over Lake’s Kachi project, which is a Global Top 10 lithium brine resource. The pilot plant would be then used on other Lake projects adjoining the major Ganfeng/Lithium Americas Cauchari project scheduled for production in late 2020. (Ganfeng recently acquired 50 percent of the Cauchari project for USD 397 million). Meanwhile, the Lilac process, which is the front end of the plant, can be producing an intermediate product quickly for processing in Asia while the back end of the plant, a lithium carbonate or lithium hydroxide plant, is being completed in Argentina and/ or Asia.
7. A question to both of you: what’s next for Lilac and Lake moving forward over the next year or so?
David: Lilac is in the process of closing a financing to allow for large scale production of the proprietary ion exchange beads in the USA, which will help Lake’s projects as well the other projects we are working on in the USA.
Steve: Lake is keen to get samples produced from the pilot plant and into the hands of battery and cathode makers in South Korea, Japan, and China. There is significant interest in receiving a premium product despite the current commentary about softness in lithium demand. This should trigger a few offtake agreements allowing for financing of the final studies, permitting, and the initial phase of the larger production plant. I’m often asked whether Lilac’s process will work – we know it works. We simply have to demonstrate how well it works at scale with high quality product to hopefully change the industry.
8. Finally, both being involved in the industry, how do you see the lithium market looking in 2020? What are some of the major factors affecting the market moving forward over the next year or so? Where are some of the opportunities in the market and what are some of the threats?
Both: The problem in the industry – from lithium supply to battery making – is that margins have been squeezed and production has been reduced as a result. There is a wide spread of prices for different qualities and types of lithium products. Negative sentiment in the capital markets has been generated as a result. Limited investment will crimp potential new supply leading to another supply squeeze soon, within nine to 24 months perhaps. Some of the stockpiled oversupply of hard rock product may not get used at all due to impurities. Not all increased supply will come from the majors. This creates opportunities for a small number of future producers who can produce high purity lithium products, especially using new disruptive technologies, and therefore source the development capital, perhaps with a phased development.