Direct lithium extraction: ten grains of salt?

Direct Lithium Extraction

Direct Lithium Extraction from brines could help lithium scale 30x in the Energy Transition; with costs and CO2 intensities 30-70% below mined lithium; while avoiding the 1-2 year time-lags of evaporative salars. This 15-page note reviews the top ten challenges that decision-makers need to de-risk, in order to get excited within the fast-evolving DLE landscape.


The need to ramp lithium 30x in the energy transition is re-capped on pages 2-3, including why this is one of the most explosive trajectories of any material we have tracked, and becoming a painful bottleneck in 2022-23.

Today’s production is dominated by mining (page 4) and evaporative salars (pages 5-6). Each of these has drawbacks, which are covered in the note.

Direct lithium extraction is a kind of holy grail for the lithium industry, a magic process that can separate all and only the lithium ions from the complex ionic soup, even at challenging geothermal brines (example charted above). However, there are ten challenges that need to be overcome before a DLE technology gets truly exciting. They are laid out on pages 8-12.

The extent of these challenges may benefit incumbents in the lithium industry (shown on page 13), as their era of excess returns persists for longer.

Promising DLE leaders are summarized on pages 14-15, along with each company’s recent progress, and the challenges we would focus upon.

For an outlook on mined lithium supply chain, please see our article here.

Lithium: reactive?

Lithium demand is likely to rise 30x in the energy transition. So this 15-page note reviews the mined lithium supply chain, finding prices will rise too, by 10-50%. The main reason is moving into lower-grade ores. Second is energy intensity, as each ton of lithium emits 50 tons of CO2, c50% due to refining spodumene at 1,100◦C, mostly using coal in China. Low-cost lithium brine producers and battery recyclers may benefit from steepening cost curves.


Inflationary feedback loops increasingly matter in the energy transition. Decarbonization technologies themselves need to be decarbonized. But this tends to re-inflate their costs. Page 2 re-caps this issue and why it matters.

An overview of the lithium supply chain is spelled out on pages 3-7, across the three major categories of “brine”, “mine” and “refine”. In each case, we aim to highlight the key numbers and energy costs.

An economic model of mined lithium can thus be derived on page 8. We outline what price is needed for a 10% IRR across the value chain.

The first re-inflation risk is the direct cost of decarbonization, which is quantified on pages 9-10, including carbon prices, energy costs and materials costs.

The second and larger re-inflation risk is the need to move into lower ore grades, to meet a 30x increase in future lithium demand. This is quantified on pages 11-12.

The impacts on batteries and electric vehicles are then translated through on page 13. We conclude that OEMs may consider backwards-integrating, to secure supplies.

Who benefits? Steepening cost curves are best for those at the bottom of those cost curves. And possibly also for battery recycling. We have screened 20 companies and discuss our conclusions on pages 14-15.

Copyright: Thunder Said Energy, 2022.