Stellantis invests more than $100 million in California lithium project
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[August 17, 2023] By
Ernest Scheyder
(Reuters) - Automaker Stellantis said it would invest more than $100
million in California's Controlled Thermal Resources, its latest bet on
the direct lithium extraction (DLE) sector amid the global hunt for new
sources of the electric vehicle battery metal.
The investment by the Chrysler and Jeep parent announced on Thursday
comes as the green energy transition and U.S. Inflation Reduction Act
have fueled concerns that supplies of lithium and other materials may
fall short of strong demand forecasts.
DLE technologies vary, but each aims to mechanically filter lithium from
salty brine deposits and thus avoid the need for open pit mines or large
evaporation ponds, the two most common but environmentally challenging
ways to extract the battery metal.
Stellantis, which has said half of its fleet will be electric by 2030,
also agreed to nearly triple the amount of lithium it will buy from
Controlled Thermal, boosting a previous order to 65,000 metric tons
annually for at least 10 years, starting in 2027.
"This is a significant investment and goes a long way toward developing
this key project," Controlled Thermal CEO Rod Colwell said in an
interview.
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The company plans to spend more than $1 billion to separate lithium from
superhot geothermal brines extracted from beneath California's Salton
Sea after flashing steam off those brines to spin turbines that will
produce electricity starting next year.
That renewable power is expected to cut the amount of carbon emitted
during lithium production.
Rival Berkshire Hathaway has struggled to produce lithium from the same
area given large concentrations of silica in the brine that can form
glass when cooled, clogging pipes.
Colwell said a $65 million facility recently installed by Controlled
Thermal can remove that silica and other unwanted metals. DLE equipment
licensed from Koch Industries would then remove the lithium.
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The logo of Stellantis is seen on a
company's building in Velizy-Villacoublay near Paris, France,
February 23, 2022. REUTERS/Gonzalo Fuentes/File Photo
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"We're very happy with the equipment," he said. "We're going to
deliver. There's just no doubt about it."
Stellantis CEO Carlos Tavares called the Controlled Thermal
partnership "an important step in our care for our customers and our
planet as we work to provide clean, safe and affordable mobility."
Both companies declined to provide the specific investment amount.
Controlled Thermal aims to obtain final permits by October and start
construction of a commercial lithium plant soon thereafter, Colwell
said. Goldman Sachs is leading the search for additional debt and
equity financing, he added.
Controlled Thermal had separately agreed to supply lithium to
General Motors by 2024, but that goal has been pushed to 2025,
Colwell said.
GM said it has a "close working relationship" with Controlled
Thermal but deferred comment on technical questions to its junior
partner. GM added it believes it has enough raw material supply to
reach its target of producing 1 million EVs by 2025.
Stellantis also has an investment in Vulcan Energy Resources, which
is developing a German DLE project.
(Reporting by Ernest Scheyder; Editing by Jamie Freed)
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