Focused on Technical Execution and Commercial Counterparts
Building on our summer commercial successes, the team is now highly focused on executing for our expanded commercial opportunity set.
The technical team is split between preparing for upcoming customer pilots, commercial scale engineering work (in particular), and further technology optimizations.
With our recently expanded customer and partner base, the commercial team is spending more time working with our commercial counterparts and customers and less time evaluating new commercial opportunities.
For this month’s update, we provide our thoughts on the evolving lithium market, give an update on our unfolding technology initiatives, and provide some insight into how the commercial team is spending their time.
KMX’s Macro View – Lithium Outlook
The multi-decade upcycle for lithium is becoming clearer with the price increasingly reflecting the looming supply and demand imbalance.
Lithium demand estimates for the coming decades vary (as highlighted in the IEA’s scenario analysis below which ranges from 13-42 times by 2040), but the continued adoption of lithium as the underpinning mineral for the energy transition remains clear, as highlighted by continued auto electrification announcements.
Figure 1: Lithium (LCE) per kg
Source: Bloomberg, Factset, Citi
Figure 2: Critical Mineral Outlook to 2040 by Scenario
Source: International Energy Agency (IEA)
How Will the World Source Enough Sustainable Lithium?
The race to bring sustainable lithium to market has begun, with some marquee lithium project developers providing public updates recently. Notably, two project developers are aiming to integrate best water management practices into development plans, in our view.
Two sustainable lithium projects moving forward – CleanTech Lithium and TETRA Technologies
Two sustainable lithium project developers, CleanTech Lithium and TETRA Technologies, both recently announced Inferred Resource Estimates for large sustainable lithium projects.
- CleanTech Lithium Setting the Standard in Chile
CleanTech Lithium is developing large lithium Salars in Chile and doing so in a way that sets the standard for sustainable lithium development in the region, in our view. The company recently published its Inferred Resource Estimate for its Francisco Basin lithium project, with a maiden inferred resource estimate of 526,994 tonnes of lithium carbonate equivalent.
KMX and CleanTech Lithium have partnered to maximize water recovery and lithium concentration for CleanTech’s lithium projects in Chile, including Francisco Basin.
Figure 3: Location of the Francisco Basin Project
Source: CleanTech Lithium
- TETRA Developing a Significant Source of Sustainable U.S. Lithium
TETRA Technologies also recently announced the publication of its maiden lithium resource for its lithium and bromine Smackover resource in Arkansas, which highlights 212,000 metric tonnes of LCE and 4.763 million metric tonnes of bromine.
Notably, the report includes TETRA’s proposed lithium production process and highlights the proposed role of vacuum membrane distillation (KMX’s underlying technology).
“TETRA’s Closed Loop DLE process is designed to conserve the use of fresh water by recycling the brine that is extracted in the various stages to aid in maximizing Li recovery and recycling fresh water obtained from the reverse osmosis (RO) and vacuum membrane distillation (VMD) stages in the process” (Apex Geoscience, 2022, Page 97).
“Final concentration will be done using vacuum membrane distillation (VMD) and TETRA has also identified a vendor for this technology and will be piloting this process using the brine from the polishing ion exchange columns. VMD will allow us to concentrate the final LiCl brine in a cost-effective manner and the water from this process will be recycled to use for lithium desorption” (Apex Geoscience, 2022, Page 103).
Figure 4: Proposed TETRA lithium carbonate production process flow diagram
Source: Apex Geoscience Ltd., TETRA Technologies, Inc.
Water and Lithium Increasingly in Focus:
We expect water’s role in the lithium development process to continue to increase in importance, as previously stated. KMX remains technology agnostic when it comes to working with DLE technologies and the team is excited to be collaborating with a growing suite of DLE solutions.
Notably, we believe companies that integrate best water practices into their development processes, like TETRA and CleanTech Lithium, will be able to reduce freshwater usage (for the water intensive DLE process), reduce costs, and maximize lithium concentration and recovery.
Alternatively, we believe new desalination capacity for lithium production (in Chile for example) will increasingly come under pressure, as it has for other mining operations in recent years.
Where the Team is Focused
The team’s focus is split in three directions currently, including: 1) technology, 2) commercial, and 3) corporate.
The technology team’s efforts are mainly focused on efficiency optimizations, client demonstrations, and commercial-scale system preparations.
Dr. Sean Ghayeni, our Head of Technology, continues to strengthen the company’s IP portfolio. Dr. Ghayeni also continues to work closely with our strategic manufacturing partner, Sumitomo Electric, to enhance KMX’s supply chain and prepare for the coming build-out in our commercial-scale systems.
Dr. Matt Narrol is currently busy preparing for upcoming lithium client demonstrations, and also preparing for a further upgrade to our vacuum membrane distillation laboratory in Mississauga, Ontario.
The commercial team continues to monitor opportunities in our core lithium market as well as qualify projects in new strategic markets of interest; however, the majority of the commercial team’s efforts are being directed to operational endeavors for our existing customer base.
As projects in our current pipeline progress, we expect our commercial efforts to increase for new focus sectors, potentially including inland desalination, chip manufacturing, pharmaceuticals, and other industries that have complex waste streams and need high-quality water inputs.
For our corporate efforts, much of our current focus is being spent working with counsel and outside advisors as it relates to various corporate partnerships and initiatives including infrastructure development, project finance, potential joint ventures, sales channel partnerships, potential corporate capital partners, and future growth markets and opportunities.
These efforts are taking up much of my time, with support from the entire team.
We hope to share more on some of these initiatives in the coming months.
For our next update, we also hope to share some operational insights, corporate developments, and updated market views.