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Oil and gas majors step up efforts to diversify into lithium

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More oil majors are likely to start moving into the lithium extraction space in a bid to cash in on the battery boom, Vulcan Energy Resources’ Chief Executive Officer Cris Moreno said.

In an interview with Dow Jones Newswires, Moreno said that cases like that of Exxon Mobil, which purchased drilling rights to extract lithium in southern Arkansas earlier this year, are going to become the norm.

Moreno added that the lithium producer, which is aiming to launch several drill sites in Germany, has been in talks with tier-two oil refiners, but declined to provide more details.

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He said that the way in which the lithium is extracted, through a relatively new process called Direct Lithium Extraction should attract more oil majors into the mining space. “Geothermal brine has a lot of similarity with oil and gas,” Moreno said.

Vulcan’s CEO said the energy industry’s experience in drilling and tapping wells for oil could be applied in a similar fashion when tapping geothermal brines for lithium.

Germany-based Vulcan is aiming to extract the metal from geothermal brines in the Rhine river valley. The hot brine, which when extracted from the ground is roughly 160 degrees Celsius (320 Fahrenheit), plays host to the silvery metal, key to lithium-ion batteries used to power electric vehicles and batteries for storage.

Vulcan’s ambition is to drill and extract the hot geothermal brine, using the heat from the brine for energy generation and the lithium for electric-vehicle batteries. The company will be starting an equity and debt fundraising round later this year.

Vulcan’s target is to initially start producing commercial lithium by the end of 2025. Under its first phase, which includes three drill sites, it aims to produce 24,000 metric tons of lithium hydroxide a year – equivalent to 500,000 electric vehicles, Moreno said. The company currently holds 15 exploration licences.

Moreno added that having a social license to operate has been a major part of Vulcan’s journey so far, working with local stakeholders to get the project off the ground.

In Europe, nearly 50 mine sites are scheduled to open by 2030, but some have faced stern opposition from locals, the most notable being Rio Tinto’s Jadar lithium project in Serbia, which has been suspended due to local opposition.

“We want to have that social license, meaning we want people to want us to be there,” said Moreno.

Horst Kreuter, one of Vulcan’s co-founders, said that the company has been working with local policymakers like town mayors to help explain the project to locals and how it can benefit them.

“A big focus is heating and the heating grids which will be supplied to the public,” said Kreuter.

Under Vulcan’s plans, the heat from the brine will be used to help generate electricity as well as heat people’s homes–something which he said has become more crucial since the war in Ukraine. “Heating is one of the biggest topics since the war in Ukraine with no cheap gas and prices going up. Here the people profit from the project.”

 

Source: Market Watch

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