The Oracle of Omaha Goes Looking for Lithium
Welcome to Lithium Link, your resource for insightful news and expert commentary on the latest happenings in the Arkansas lithium scene.
This week: June 21
Legendary investor Warren Buffett and his company, Berkshire Hathaway, have become the latest to see the value in developing a robust, domestic battery-grade lithium source in the United States.
Berkshire Hathaway’s wholly owned subsidiary, BHE Renewables, announced earlier this month a joint venture with Occidental, an international energy company, to use direct lithium extraction to produce lithium from geothermal brine in California’s Imperial Valley.
BHE Renewables says its 10 power plants in the valley process 50,000 gallons of brine per minute to produce 345 megawatts of clean energy. The companies aim to extract lithium from that brine.
Direct lithium extraction, or DLE, is the process Standard Lithium Ltd. of Vancouver is perfecting at its demonstration plant near El Dorado in South Arkansas. Standard has plans to grow that plant into one that could produce 5,000 tons of lithium products per year and has purchased property in Lafayette County to build a $1.3 billion plant that could make 35,000 tons per year.
Buffett’s play is happening 1,500 miles from South Arkansas. But it’s another sign that key domestic energy players see the potential in major commercial lithium mining using the DLE method, and they’re putting their money behind it.
Read more: Go deeper into the partnership at The Northern Miner and here.
Back Home
Another month, another new player in Arkansas lithium. TerraVolta Resources LLC of Houston announced earlier this month that it secured “a significant strategic position in the Smackover Formation” in South Arkansas and drilled “a successful appraisal and supply well” there.
The company is owned by Houston investment firm Energy & Minerals Group, which, according to the Arkansas Democrat-Gazette, “manages around $14 billion in assets as of the end of March and makes natural resource equity investments of $150 million to $1 billion.”
In a news release, TerraVolta CEO Jamie Liang said the company “identified the Smackover as a compelling prospect for lithium and other critical mineral development.”
“TerraVolta’s lithium projects will enable the U.S. to build out a domestic battery supply chain and reduce our reliance on foreign sources,” he added.
The company has not said where in South Arkansas its well is located, nor did it provide financial details of operations there.
Read more about the company’s plans in the Democrat-Gazette and Arkansas Business.
Louisiana Lithium?
As you know, the Smackover Formation in South Arkansas has been ground zero for new lithium exploration, and companies are also exploring the possibility of lithium extraction in the formation in Texas. But can another state get in on the lithium action?
According to the Shreveport-Bossier City Advocate, Louisiana is looking for lithium in the northern part of the state, which is also part of the Smackover Formation. While it hasn’t been found — that we know of — state lawmakers have already approved a sales tax rebate for those who purchase "equipment, machines and other items used in lithium recovery activities."
Sen. Stewart Cathey, R-Monroe, expects more incentives to come: "My expectation is that next year we'll see a pretty robust package to further incentivize the production of lithium in the state."
But what if there’s no Louisiana lithium to be found? The Lithos Group, a Canadian company involved in lithium production, thinks there are other minerals and chemicals available in the underground brine there, including:
“... rubidium, cesium, gallium, and platinum group metals, all of which are used in the computer, transportation, and energy industries. Those chemicals are in addition to sodium, potassium, magnesium, and calcium already known to be present in oil field brine.”
“There's still so much that’s unknown if you’re a landowner hoping to get a lease,” Shreveport-based mineral consultant Skip Peel told the Advocate, “and there’s a lot to negotiate other than what comes up out of the ground.”
Parting Shot:
This June 12 Arkansas Democrat-Gazette editorial takes note of the TerraVolta Resources investment in Arkansas, and states:
“It would be easy to assume that [the] rise of lithium production in the area is directly linked to the rise and fall of demand for electric vehicles, which certainly plays a role in market dynamics. However, even without electric vehicles in play, cellphones and many other electronic devices that require battery electric storage show no signs of slowing down any time soon, if ever.”
“The south Arkansas brine-to-lithium should be an economic boon to Arkansas in coming years. And the sooner that boon gets here, the better for the whole state.”
More: Read the full editorial here.
