What will it take to accelerate US-based lithium refining?

Ahead of Benchmark GIGA USA 2025, Venkee Sharma, Executive Chairman at Aquatech, discusses the challenges and opportunities facing the growth of US lithium refining capacity.

Lithium refining capacity and self-reliance for US Lithium supply in the US has great potential, but it’s currently unmet. To meet demand by the end of the decade, we must change the trajectory of the US lithium landscape to avoid unpredictable supply chains and pricing, high capital expenditure, and impacts to some of the nation’s most critical industries.

Securing adequate supply of lithium for EV and ESS Batteries

Technology 

Building robust lithium refining capacity at scale demands a careful selection of technologies, including integration with AI to drive consistent optimal performance. Even the best technologies must be applied holistically. Eagerness for technological advancements often leads to myopia, zooming in on individual components rather than the entire process train.

The scope of Direct Lithium Extraction (DLE) technology, for example, promises significant improvement compared to more traditional methods of extraction, and has been successfully applied. But, unfortunately, it has become a buzz word that neglects several other  intricate process stages: lithium extraction and processing is so much more than DLE, it’s a full process wrap which includes complex process flow sheet optimization.

Silver bullet technologies do not exist: multi-billion-dollar lithium projects cannot be underpinned on a mirage.

Effective collaboration

Experienced process technology partners augment resource owner capabilities and offer know-how that drive shorter project schedules, increases cost and schedule certainty, secures process validation and guarantees and support operational performance consistently delivering a high purity product. This is true especially at scale, making start-ups unlikely to fill this requirement.

Whether for brine, clay, or rock, effective collaboration can also ensure the viability of specific feedstock through proper optimization. Partners operating from a deep lithium process knowledge and complex flow sheet delivery experience offer more than extraction expertise, they deliver entire process optimization built on proven technologies:

• Capital Costs that consider factors such as modularization & other strategies to take cost out of the field, elegant solutions reducing number of unit operations, and reduced facility footprint

• Operating Costs that consider factors such as chemicals & sludge reduction, and robust plant design for consistent performance and availability

• Recycle streams for improved Lithium recovery

• Reduced Water Footprint

Experienced developers partnering with the right process technology execution teams will also positively transform outputs for stakeholders, including automotive, battery companies, equity and debt providers.

Ecosystem needs for achieving lithium production at scale

Building a US ecosystem that uplifts lithium refining capacity demands a nuanced, collaborative approach, encompassing:

Enhanced government support

Both federal and state policies must enact policies that hearten, not hinder projects in lithium – particularly in the context of permitting. Although we have proven critical minerals reserves, permitting delays and, at times, questionable legal challenges unnecessarily delay projects. Federal and State Governments need to dramatically reduce permitting times (already in play at the Federal Level).

There is an urgent need for clarity and certainty of government loans, incentives and other accelerators- EV leading countries have been doing this consistently for about 15 years- we can't believe "at scale processing" can happen by just wishing it to happen!

Many competing nations have clarity around government support, whether it’s permitting, loans or other incentives, where there is a plan to create conditions under which at-scale processing can occur without hindrance.

Financial reprioritization

Financial motivations will determine uptake in lithium sector participation – from maturation of debt providers and bankable opportunities from offtakers, to tax incentives. Specialist understanding from private equity and infrastructure funds will ensure the availability of equity projects; the same is true with major commercial banks for debt funding gaps.

Automotive and battery companies need to partner with Developers and Execution Teams to make projects succeed. A realistic view on bankable offtakes and minimum IRRs and Debt coverage ratios on the lower end is needed. Support in the form of Equity financing and Product Pre-payments will be important enablers moving forward.

Embedding shared risk and rewards between stakeholders will also cement industry cohesiveness.

Shift to regional data

Global demand data does not reflect regional realities and demands. In the US, while EV growth slows, ESS ramps up in the face of rapid data center expansion, making regional requirements more acute than global data suggests.

Closing the loop on US lithium refining capacity

At-scale lithium refining capacity is within our grasp. The technology is here, but it is not a panacea to languishing project economies. Process technologies need process technology leaders with real experience in large scale project delivery and operations through life-cycle. In parallel, political and financial landscapes can carve out the conditions necessary for shaping an ecosystem that uplifts domestic lithium refining capacity, catalyzing secure lithium supply chains for generations to come.