Lithium, the Salton Sea and a startup that’s trying to change the game

http://gigaom.com/

By Katie Fehrenbacher

photo: Image courtesy of Katie Fehrenbacher, 

Gigaom. 

Summary: Novel tech from a young startup could break the log-jam for American-produced lithium and change the future of electric car batteries.

Just south of the Salton Sea — the salty, shrinking 350-square-mile lake that was formed as the result of an engineering accident in the early 1900s — a six-year-old tech startup has been extracting the “white gold” that lies thousands of feet below the surface. That valuable material, lithium, can be used in batteries for electric cars and cell phones, and the project has piqued enough interest that execs from a handful of battery makers, as well as electric car company Tesla, have visited the site.
On a typical baking-hot, dusty summer afternoon off an industrial road outside of Calipatria, California, Simbol Materials’ executives showed me the series of gray pipes and beige tanks that have so far extracted a few hundred tons of lithium product from the mixture of hot water and mineral deposits that’s pumped up to the surface by a neighboring geothermal power plant. Simbol’s plant collects this hot geothermal “brine,” purifies it, extracts the lithium — and in the future other valuable materials like manganese, zinc and potassium — and sends the water back to the geothermal plant to be reused in the system.

Simbol Materials’ VP of business development Tracy Sizemore 

stands in front of Simbol’s demo plant, which neighbors

 EnergySource’s geothermal plant just below the Salton Sea. 

Image by Katie Fehrenbacher.

The project is only at the demonstration scale right now, but the company plans to build a much larger (1,000 times larger in terms of volume produced) commercial-scale factory just south of the current one that could eventually create 15,000 metric tons of lithium carbonate equivalent a year. Lithium carbonate is one of the two lithium products that Simbol’s tech can deliver; the other is lithium hydroxide. Depending on the type of battery chemistry used, lithium ion battery makers would buy one or the other.

It might not sound like much, but if the venture capital-backed startup is able to scale up this process economically and efficiently, it could some day provide an important U.S.-based source of lithium for the emerging electric car battery market. Currently much of the world’s lithium comes from huge evaporation ponds in Argentina, Chile and China (and some day Bolivia). They take months to produce lithium, and have some notable environmental, as well as social, drawbacks.

A geothermal power plant owned by EnergySource, called Hudson Ranch Power

 I, or the FeatherStone plant, which is the location of Simbol’s demo plant. 

Image by Katie Fehrenbacher.

The United States Geological Survey (USGS) estimates there are about 13 million tons of economically recoverable lithium reserves in the world. By some estimates, the Salton Sea could provide 800,000 tons of that. If Simbol is able to tap into more of the abundant geothermal resources around the Salton Sea it could also help revitalize the area, offering jobs to help combat a disturbingly high unemployment rate in the county, and also deliver needed money to funds that could help manage the effects of the shrinking Salton Sea.

Sizemore stands next to tubs of lithium carbonate in a 

liquid substance at Simbol’s lithium extraction plant. 

Image by Katie Fehrenbacher.

The Salton Sea

The Salton Sea region sits at one of the lowest points in southern California, about 50 miles from the Mexican border. Simbol’s project rests on land that’s 210 feet below sea level. It’s believed that millions of years ago the area was part of the Sea of Cortez down south, and it might still be if there weren’t an elevation rise between the two points and silt blockage by the Colorado River. Because of the unique geography, over the centuries it’s been home to several lakes that have emerged and then evaporated, leaving behind salt and other minerals.
In 1905, the Colorado River broke through an irrigation system diversion canal in the area and over the course of the next two years spilled 400 square miles worth of water into the basin. While engineers thought the water would soon evaporate, the sea was fed by nearby agricultural runoff and in the 1920’s developed into a recreational tourist hot spot, filled with yacht clubs, boat races, introduced fish (like tilapia) and bird wildlife. In the following decades, developers, residents and business owners moved into the area, hoping that it would become the next Palm Springs by the sea.

The Salton Sea, right outside of Bombay Beach. Image by 

Katie Fehrenbacher.

But with no naturally occurring water flowing into it, only salty agricultural run off, the sea became increasingly brackish and stagnant, leading to bizarre and harsh effects on the local ecosystem. Huge fish populations would suddenly die in a day. Bird botulism emerged. A stench can emanate from the sea depending on the way the wind is blowing. Even before these problems, a couple large tropical storms in the seventies overwhelmed the area with extreme flooding, ruining buildings on the edge of the sea.

The view off of Bombay Beach. Image courtesy of Justin Kerr

 Sheckler, Flickr Creative Commons.

As a result, many residents and developers have abandoned the land and it’s now more associated with an apocalyptic decay. Slab City is an area about 15 miles from Simbol’s project, filled with trailers and tweakers. I stopped by Bombay Beach — a small residential area on the southeast side of the sea, which was recently profiled by Israeli filmmaker Alma Har’el — and someone had tagged “abandon all hope, ye who enter here” on one of the many abandoned buildings.
Now the Salton Sea has become the latest battleground for water-hungry southern California and even the runoff is being diverted. Starting in 2017, the water that was going into the Salton Sea will go to San Diego and Los Angeles. A restoration effort is supposed to be in place by that time that will help deal with the fallout, including what will happen to the  birds (there is an important pelican population), and how to deal with dangerous dust clouds that will emerge from the playa as the sea recedes.

A dilapidated building in Bombay Beach at the Salton Sea.

 Image courtesy of EsotericSapience, Flickr Creative Commons.

Underground power

What the Salton Sea area does still have — no matter what happens to the water — is abundant geothermal power assets underground, as well as lithium deposits. The two actually go hand in hand, and the sea sits directly on the San Andreas fault. A dozen geothermal plants are already built in the region, including the most recent one that went online in 2012: EnergySource’s project, where the Simbol lithium extraction is happening.
The Salton Sea is so exciting to the geothermal industry that an entire section of the recent Geothermal Energy Association conference focused on the region. At that event, Simbol’s Sizemore called the area “a world-class global resource for lithium.”

The geothermal pipes that connect wells to EnergySource’s

 geothermal power plant. Image by Katie Fehrenbacher.

If Simbol can make geothermal drilling and production more economical, it will likely only be good for the transitioning region. Simbol doesn’t necessarily need geothermal brine to extract lithium and other minerals from the ground, but for a startup, it’s a symbiotic relationship that makes the process cheaper.
Initially, geothermal wells can be expensive to drill because they often don’t produce as much power as desired; it takes several wells drilled to hit the right spot. EnergySource recently halted its planned expansion around the Salton Sea because of this exact problem. But by partnering with Simbol, EnergySource can potentially get some of its drilling investment back through proceeds from lithium sales.

Ormat operates a geothermal power plant in Brawley,

 California, in the Salton Sea region. Image by Katie Fehrenbacher.

Restoration of the Salton Sea could also potentially get some help if Simbol is able to successfully scale up its technology. The idea is that Simbol, working with geothermal power producers, could lease land for projects owned by the Bureau of Land Management, the State of California or the Imperial Irrigation District. The money for the land could go into a fund that would then deal with dust control or bird habitats. That’s the theory, anyway; it remains to be seen what exactly will happen with the restoration process.

Valley of death

All of these plans hinge on whether Simbol can scale up its technology economically and efficiently. The company is now trudging through that infamous “valley of death” — the space between proving that a technology initially works and building it out to a commercial scale — and it’s this stage that has killed many a startup in the energy, resource and materials sectors.
Simbol’s Sizemore tells me Simbol plans to break ground on its commercial plant in January. The company had previously planned to do this more quickly, but there’s a lot to work to do before the building, which will likely cost hundreds of millions of dollars, begins.

Simbol Material’s office in Brawley, California. Image by

Katie Fehrenbacher.

First, Simbol is spending considerable time designing the plant. Sizemore tells me everything is being computer modeled, down to each bolt, to make sure it’s as efficient and ergonomic as possible.
In addition, the company is also still closing on its funding. Funding for cleantech startups has been difficult to get in recent years, though Simbol has received an usual amount of attention for its technology. Sizemore says it’s close to closing funding for the plant, and an IPO could be in the works in 2017 if everything goes according to plan.

A sand dune on a freeway outside of the Imperial Valley. 

Image courtesy of Katie Fehrenbacher, Gigaom.

Simbol is so far publicly backed by Mohr Davidow (MDV), Firelake Capital and Japanese industrial giant Itochu. While venture capitalists have been backing the company up to this point, most likely it’ll be a combination of project equity investors and banks that step in for the next commercial phase.
At one point, local media was proclaiming that Simbol, and its domestic lithium extraction, might be enough to help draw the construction of Tesla’s huge battery factory down to the Imperial Valley, but it always seemed as if that was a long shot. Tesla announced last week that it plans to build its battery factory just outside of Reno, in Nevada. Nevada is already home to one of the only operating lithium mines in the country.

A spot off the highway where people throw their old shoes in 

Imperial Valley. Image by Katie Fehrenbacher, Gigaom.

No one really knows how long it will take to scale up Simbol’s extraction technology. The company is only six years old. That might seem like a lifetime for a photo-sharing app developer or even a computing device maker, but for an industrial lithium extraction company, it’s a mere infant.
What’s really promising about the company is that it’s using tech innovation to try to change the dynamics of lithium extraction. If successful, it could disrupt the South American-dominated market. Just as new drilling technology forever changed natural gas development, it’s plausible that new lithium extraction could change that industry, too — and just in time, because people around the world are sucking down more and more lithium in their insatiable demand for battery-powered devices.