General Motors moves deeper into mining with EnergyX lithium investment

Compass Minerals International

11/04/2023 13:00

By Ernest Scheyder
       April 11 (Reuters) - General Motors Co  GM.N  will
announce on Tuesday an investment in lithium technology startup
EnergyX as it expands further into the mining industry, the
latest deal by the auto giant to ensure long-term supplies of
the metal used to make electric vehicle batteries.
        The global push by automakers to electrify their fleets
has sparked a rush for stable 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
technologies (DLE) that could help GM filter the metal for its
Ultium battery packs from some types of brine that have been
largely ignored by the mining industry in favor of evaporation
ponds and open-pit mines.
        Brine deposits are essentially salt-infused waters found
throughout the globe. Many teem with lithium, calcium and other
minerals, and DLE technologies aim to separate out the lithium
and leave the rest.
    As part of the investment, GM's scientists will work to help
EnergyX commercialize the DLE technology, trying to succeed
where it, rivals Rio Tinto Ltd  RIO.AX , BMW  BMWG.DE -backed
Lilac Solutions Inc and others have so far failed. 
    The automaker plans to lead a Series B round of financing
for EnergyX worth $50 million and to help finance EnergyX's
future expansions across North and South America. 
    GM, which declined to say how much of the Series B round it
was funding, 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 purchasing and supply.  
        EnergyX, also known as Energy Exploration Technologies
Inc, has 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.
    
    LITHIUM METAL FROM BRINE
    EnergyX has said its technology can make lithium metal
directly from brine, a tantalizing prospect for GM that could
let the automaker bypass lithium refining, which is widely seen
as a key supply chain bottleneck. 
    The EnergyX investment comes after GM in January agreed to
pay $650 million to become the largest shareholder in Lithium
Americas Corp  LAC.TO , which is developing the Thacker Pass
clay lithium project in Nevada. 
    The automaker in 2021 also invested in privately held
Controlled 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 when officials in Bolivia - home to
the world's largest lithium resource - disqualified the startup
from a DLE selection process. 
    "This GM investment will completely change the trajectory of
EnergyX," said Teague Egan, the startup company's founder and
chief executive. 
    EnergyX is building five demonstration facilities that it
plans to locate in Argentina, Chile, and in the U.S. states of
California, Arkansas and Utah. Potential customers would supply
brine from acreage that they own in order to test EnergyX's
technology, before signing any development deal.
    The sites selected in the United States are near existing
lithium brine reserves owned by Standard Lithium Ltd  SLI.V ,
Compass Minerals International Inc  CMP.N  and CTR, each of whom
has selected a DLE technology provider but not yet launched
production. 

 (Reporting by Ernest Scheyder; Editing by Peter Henderson and
Jamie Freed)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))