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Lithium: The New California Gold Rush – Forbes

Some 6,000 feet below Erceg’s feet lies what may be one of North America’s largest deposits of lithium, a high-priced element essential to our high-tech civilization and a key component in everything from iPhones and iPads to electric car batteries. Gambling on an electric-vehicle boom to drive lithium demand, Erceg’s startup, Simbol Materials, aims to sell tons of the stuff not by mining it but by pumping it up from the Earth’s depths.

The lithium is suspended in the scalding geothermal brine that the region’s power stations bring to the surface, tapping the heat to create steam for electricity- generating turbines. Simbol borrows the cooled brine before it is pumped back under this stark desert 130 miles east of San Diego and extracts the lithium through a novel technology. If it lives up to its promise, Simbol could break the grip of South American multinationals like Chile’s SQM that now control the multibillion-dollar lithium trade.

“It’s definitely an oligopoly,” says Erceg, Simbol’s 40-year-old cofounder and chief executive, who has lined up $43 million in funding from Japanese conglomerate Itochu and Silicon Valley venture capital firms Mohr Davidow Ventures and Firelake Capital. “We really want to move the needle on lithium production in the U.S. and revive the industry here.”

As recently as the 1990s the U.S. dominated lithium production. Back then companies mined the superlight element from seams of spodumene, a mineral found in North Carolina. But as the consumer electronics revolution drove up demand for lithium ion batteries, South American companies began tapping vast reserves of lithium that lay suspended in brine a few hundred feet below the surface of ancient lake beds. They pumped the brine into giant evaporation ponds to let the sun extract the lithium, a method that proved to be far cheaper than hard-rock mining. The U.S. industry withered.

Worldwide lithium production totaled 25,300 metric tons in 2010, according to the U.S. Geological Survey. (In a sign of just how insignificant a player the U.S. has become, the agency does not release domestic lithium production data because the nation’s sole producer, Chemetall, considers the information proprietary.) The USGS estimates worldwide lithium reserves at 13 million tons; Simbol thinks there’s 800,000 tons—about $4 billion worth—below the Salton Sea region.

“If Simbol is able to do this successfully, that’s a pretty huge resource to start mining from,” says Brian Jaskula, a lithium specialist with the USGS in Reston, Va. “If you can get it to the market quickly at the same price as evaporative brine or even cheaper, you have a competitive business.”

The company, which employs 52 people and is headquartered in the San Francisco Bay Area suburb of Pleasanton, is locking up the lithium through deals with geothermal companies. Simbol bought 150 acres to build its first production plant, which will sit adjacent to a 50-megawatt geothermal power plant now under construction near the Salton Sea town of Calipatria. The company will pay the geothermal plant’s owner, EnergySource, royalties from the lithium it sells after production begins next year.

via Lithium: The New California Gold Rush – Forbes.

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