Lithium Clay: America's Secret Weapon To Outmaneuver China On Lithium Shortages

• Lithium clay deposits may be the solution to the United States' lithium supply challenges

• US Critical Metals USCMF is hunting for a new lithium clay deposit in Nevada

• The race for lithium has intensified, as the United States and China set to become major rivals in the race to electrify the globe 

By Adriaan Brits

What does the US do better than any other country in the modern era? Use science and technology to address significant issues. And the looming lithium shortfall is a significant issue.

As the world shifts toward electric vehicles (EVs) and renewable energy sources, the demand for lithium - a critical component in rechargeable batteries - is skyrocketing. With the lithium shortfall looming, the United States and China are in a race to secure their lithium supply. Recent research backed by China indicates that the country is stepping up in the race for lithium, while older research shows that this race has been going on for quite some time. Now, with the advent of EVs and the projected lithium shortage, America has the incentive to go all out on lithium exploration, development and production.

However, where will the US domestically secure lithium? Lithium has historically been sourced from brine operations in Latin America (lithium found within liquid that is extracted) or hard rock in Australia (lithium found within pegmatite rocks that is extracted). The US does not currently have the same scale of opportunities that these parts of the world process. But, what the US does have, is a significant amount of lithium found in claystones.

Enter US Science And Technology Capabilities…   

Like Cassius Clay: Lithium Clay Can Deliver a Real Punch

Predominately found in the great state of Nevada, the processing of lithium bearing claystone into battery grade lithium is the embodiment of American scientific and technological capabilities.   

The process of extracting lithium involves a combination of physical and chemical processes. First, the clay is mined and crushed into a fine powder. The powder is separated into other minerals, impurities in the clay and lithium.

The resulting solution containing lithium is then treated to further purify the lithium. The lithium can then be converted into lithium carbonate or other forms for use in batteries or other applications.

Extracting lithium from clay can be more environmentally friendly than other methods of lithium extraction, such as from brine or hard rock. This is because the processing of clay does not typically involve large evaporation ponds or the use sulfuric acid, which can have negative environmental impacts.

Darren Collins, the CEO of US Critical Metals is focused on discovering a new lithium claystone deposit in Nevada. He said: "Our company is the embodiment of the entrepreneurial spirit and will leverage the advancements in science and technology to explore for new lithium clay deposits in Nevada. We are committed to driving sustainable growth and fostering a cleaner, greener future for the US." 

When asked about groundbreaking advances in the efficiency of Lithium clay production, Collins said “Our ability to utilize these advancements in the extraction of lithium from clay will mean we can quickly advance any discoveries with minimal cost compared to companies with more advanced projects.” 

The investment Case for Lithium from Clay: 

What exactly is Collins talking about?

Lithium production from claystone has been proven on a pilot plan scale to produce economic results. Specifically, this means the extraction process has been proven on a non-commercial scale and now needs to be scaled to commercial production.

Here is the game changing opportunity for lithium from clay…

Recently, Lithium Americas Corp. LAC announced a deal with US auto giant General Motors Company GM to advance the Thacker Pass lithium clay project through to commercial production. The two-stage investment commitment from GM represents a total investment of $650 million. The stage one commitment of $320 million has already been completed. 

This means that Lithium Americas and General Motors advance Thacker Pass to commercial production and presumably prove the commercial scale economics of the extraction of lithium from claystone, that the overall value of lithium clay deposits should derisk and considerably increase in value. Also, given these assets are located within the US, a premium should be assigned to them given the strategic importance of US domestic supply and the stability of the US legal framework compared to other parts of the world.

This presents a significant opportunity for US Critical Metals and other companies focused on lithium clay to leverage the work done by Lithium Americas and GM. American science and technological advancement at its finest.  

The Perfect Storm: Surging EV Demand, Lithium Prices and Science and Technology Bring Online New Sources of Supply

Lithium is a commodity in the early phases of what looks like a super cycle about to unfold. While it is difficult to predict with absolute certainty, there are strong indications that lithium investments may prove more lucrative than those in gold and other precious metals in the coming years. The rapid growth of electric vehicles and renewable energy markets, coupled with the scarcity of lithium resources, suggest that the demand for this essential element could potentially outpace traditional investments. 

The demand for electric vehicles (EVs) in the United States is nearing a breakout point, driven by a combination of factors including technological advancements, policy incentives, and increasing consumer interest. According to the Bureau of Labor Statistics EVs have experienced significant growth in recent years, and the transition to electric transportation is well underway.

This shift towards electric vehicles can be attributed to improvements in battery technology, which have led to longer driving ranges and shorter charging times. Furthermore, federal and state-level policies have provided incentives for both consumers and manufacturers, encouraging the adoption of EVs. 

These incentives include tax credits, rebates, and various other benefits designed to make electric vehicles more affordable and accessible. As a result, consumer interest in EVs has been steadily increasing, with more people considering electric cars as a viable alternative to traditional internal combustion engine vehicles.

All of these factors contribute to the growing demand for electric vehicles in the US, signaling that the country may be on the cusp of a significant breakthrough in the adoption of clean and sustainable transportation solutions.

These market dynamics combined with a new source of stable, secure and more environmentally friendly source of lithium within the US could be the perfect storm for investment and the means the US needs to resolidify its position as the leading global economy.

Lithium's importance cannot be overstated. As a critical component in the batteries used to power electric vehicles and store energy from renewable sources, lithium is vital for a greener future. 

Domestic Solar Transition As A Secondary Demand Driver: 

Another significant factor driving the increased demand for lithium is the rising adoption of home solar systems. As more households switch to solar energy, many are utilizing lithium batteries for power storage, further contributing to the growing need for this essential element. According to a report by Pew Research Center, the adoption of home solar panels in the United States has seen a consistent upward trend. This surge in solar energy usage, coupled with the dependence on lithium-based storage solutions, reinforces the crucial role of lithium in shaping a sustainable and energy-efficient future.

Lithium Exploration In The US: 

The United States, recognizing the urgency to secure its lithium supply, is turning its attention to lithium clay deposits. These deposits, found primarily in Nevada, could provide a significant source of lithium for the country. By ramping up lithium production from these deposits, America hopes to not only reduce its reliance on lithium imports but also position itself as a major player in the global lithium market.

Reading Between The Lines On Foreign Policy Reveals A Lot:

One might say that if the United States raises an eyebrow at its European allies relying on Russian gas, it's quite evident that the prospect of them being tethered to Chinese lithium would certainly ruffle Uncle Sam's top hat!

Hence, it is valuable to monitor businesses that have been granted and will be granted permission to explore lithium clay deposits in the United States.

Companies To Watch

• US Critical Metals

• American Lithium AMLI

• Lithium Americas LAC

• Century Development

• Ioneer IONR

The Importance Of US Lithium Clay Exploration 

As the race for lithium intensifies, the United States has every incentive to catch up with China's lithium production capabilities. With the projected lithium shortfall, it is clear that the stakes are high, and both nations have a vested interest in securing their lithium supply to meet the growing demand for electric vehicles and renewable energy storage solutions. 

Given that Tanzanian lithium clay exploration is almost in a wedge between the advance of ISIS in nearby countries and other regional conflicts that threaten to spread, the importance of lithium clay exploration on American and European soil is a frontier critical to sustained Western leadership in a world mired in conflicts. 

Disclaimer: This article is for informational purposes only and does not constitute investment advice.