U.S. steps away from flagship lithium project with Buffett's...

U.S. steps away from flagship lithium project with Buffett's Berkshire

Oct 5 (Reuters) - In a February meeting with mining executives, President Joe Biden laid out an aggressive goal for the United States to produce more of its own minerals for the electric vehicle revolution in ways that respected the environment.

A "big part" of those efforts, the president said, was a plan by Warren Buffett's Berkshire Hathaway Inc to filter lithium from superhot geothermal brines swirling beneath California's Salton Sea, something that had never been done before. The project aimed to help usher in a new way of producing lithium – a key constituent of EV batteries – in the United States while avoiding the controversies that come with building mines that are often unpopular with local communities. The U.S. Department of Energy had chosen Berkshire the day Biden was inaugurated in January 2021 for a $14.9 million grant to study how Salton Sea-region lithium could be used to make lithium hydroxide, a specialized type of the metal that produces more efficient and longer-lasting EV batteries.

Berkshire, however, is facing problems extracting lithium from Salton Sea geothermal brines, according to three sources with direct knowledge of the operation who declined to be identified so as not to jeopardize future relationships with the company. In a statement to Reuters, Berkshire said it had planned to develop "a first-of-its-kind demonstration plant to produce lithium hydroxide" but "subsequently decided to use a commercially proven process" to produce lithium carbonate instead." This change in technology increases the likelihood of success and accelerates the speed to market," Berkshire spokesperson Dan Winters said. The company declined to comment for other parts of this story.

Berkshire's decision not to make hydroxide from the Salton Sea - and to forego the federal funding for that - indicates it likely faced far more complex technical challenges than it expected, four analysts told Reuters." It's an indication to me that they have some real challenges standing in their path to commercial lithium production," said Chris Berry, an independent lithium industry consultant who is not involved in Berkshire's project. Privately held Controlled Thermal Resources Ltd and Energy Source Minerals LLC are also trying to extract lithium from Salton Sea brines with different DLE technology for eventual use in EV batteries, but neither are at commercial production."

The magic here is elusive," said Anderson, the Colorado professor. "It's not as easy as people portray it to be."