Rio Tinto’s Lithium Startup ElectraLith Secures Funding for Water-Free Extraction Technology

Despite a challenging global lithium market, ElectraLith, a Melbourne-based lithium technology startup backed by mining giant Rio Tinto is poised to close a A$27.5 million ($17.8 million) funding round. This news comes as the company prepares to revolutionize lithium extraction with its water and chemical-free technology.

As reported by several news agencies, ElectraLith's innovative approach focuses on a filtration process that extracts lithium directly from brine deposits. This method, critical for arid regions like Chile's Atacama Desert, requires minimal energy compared to traditional methods.

“The lithium market is not great, venture capital markets aren’t great, [so] the fact we are about to close this round with an oversubscribed investor base. for us that’s fantastic,” said CEO Charlie McGill in interviews.

ElectraLith isn't alone in the race for a more efficient extraction process. Several companies, including Exxon Mobil, are developing their own Direct Lithium Extraction (DLE) technologies, targeting a projected market exceeding $10 billion in annual revenue within a decade.

DLE promises to significantly reduce production time for lithium, a key component in electric vehicle batteries and electronics. Traditional methods, which rely on evaporation ponds and open pit mines, can take months or even years.

ElectraLith's DLE-R process, for which they hold commercialization rights, utilizes two membranes to filter brine. This filtration process not only extracts lithium but also converts it into lithium hydroxide before returning the remaining brine to its source.

McGill highlighted the ongoing effort to scale the membrane technology for large-scale projects while preserving its core functionalities. ElectraLith retains full commercialization rights for this technology.

The company plans to utilize the raised funds to construct its first pilot plant at Rio Tinto's Rincon operations in Argentina. This project is expected to be operational within a year. Two additional pilot plants are also planned.

ElectraLith claims their water and chemical-free process allows them to compete at roughly half the cost of competitors. Highlighting the importance of water conservation, McGill stated, "The availability of water in the regions where there are lithium mines is a major problem."

He cited the example of Utah, where ElectraLith is collaborating with Australia-listed Mandrake Resources (MAN.AX). Water scarcity in the region necessitates diverting Colorado River basin water to Las Vegas and Los Angeles, making water permits for traditional mining practices nearly impossible to obtain.

"You can’t get a water permit," McGill said. "So, we show up and we are like, 'We don’t need water.'"

ElectraLith's water-free approach has the potential to disrupt the lithium extraction industry, offering a more environmentally friendly and cost-effective solution for a future heavily reliant on lithium-based technologies.