April 11 (Reuters) – General Motors Co ( GM.N ) will announce an investment in lithium technology startup EnergyX on Tuesday as it expands further into the mining industry, the latest deal the carmaker has made to ensure long-term supplies of the metal. Used to make electric vehicle batteries.
A global push by automakers to electrify their fleets has created a rush for steady supplies of lithium, copper, nickel and other critical minerals. Demand is expected to exceed supply by the end of the decade, fueling interest in novel production methods.
Privately held EnergyX is one of several companies developing so far unproven direct lithium extraction (DLE) technologies that could help GM filter metal for its altium battery packs from certain types of brines largely avoided by the mining industry. Evaporation ponds and open pit mines.
Brine deposits are essentially salt-infused waters found all over the world. Many lithium, calcium and other minerals, and DLE technologies aim to isolate the lithium and leave the rest.
As part of the investment, GM scientists will work to help EnergyX commercialize the DLE technology, where rivals Rio Tinto Ltd ( RIO.AX ), BMW ( BMWG.DE )-backed Lilac Solutions Inc and others have so far attempted to succeed. are failed GM told Reuters that DLE “may be the most efficient way to extract lithium from brine sources.”
The automaker plans to lead a $50 million Series B financing round for EnergyX and support EnergyX’s future expansion into North and South America.
GM, which declined to say how much of the Series B round was funded, will have the right of first refusal to buy lithium from any projects that EnergyX develops.
“We are committed to securing EV-critical minerals that are sustainable and cost competitive,” said Jeff Morrison, GM’s vice president of global procurement and supply.
EnergyX, Energy Exploration Technologies Inc, said it aims to launch an initial public offering by 2024. As part of any IPO, private equity firm Global Emerging Markets Group plans to invest $450 million in EnergyX once shares begin trading.
EnergyX said its technology could make lithium metal directly from brine, a tantalizing prospect for GM that would allow the automaker to bypass lithium refining, which is widely seen as a major supply-chain bottleneck.
The EnergyX investment comes after GM agreed in January to pay $650 million to become the largest shareholder in Lithium America Corp ( LAC.TO ), which is developing the Thacker Pass Clay lithium project in Nevada.
In 2021 the automaker also invested in privately held Thermal Resources Ltd. (CTR), which is trying to use DLE technology to develop a geothermal brine project in Southern California.
GM’s investment is a major vote of confidence in EnergyX, which was stung last year after authorities in Bolivia — home to the world’s largest lithium resource — disqualified the startup from the DLE selection process.
“This GM investment will completely change the trajectory of EnergyX,” said Tig Egan, founder and chief executive of the startup company.
EnergyX is building five demonstration facilities it plans to locate in Argentina, Chile and the US states of California, Arkansas and Utah. Potential customers will supply saline water from land they own to test EnergyX’s technology before signing any development contracts.
The selected sites in the United States are near lithium brine deposits owned by Standard Lithium Ltd ( SLI.V ), Compass Minerals International Inc ( CMP.N ) and CTR, each of which has selected a DLE technology provider but has not started production. .
GM said it is working with CTR and EnergyX to find the best technology to extract lithium from California’s Salton Sea, where CTR is trying to use technology from Lilac Solutions, Koch Industries and others to produce the battery metal.
“With CTR we have great resources and with EnergyX we have great potential technology,” said GM spokeswoman Priscilla Zuchowski.
Reporting by Ernest Scheyder; Edited by Peter Henderson, Jamie Freed and David Holmes
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