According to the latest news, General Motors has struck a deal with a mining company to source lithium from geothermal deposits in the US. Lithium is a key ingredient of electric car batteries. General Motors is going to make a “multi-million dollar” investment in Australia’s Controlled Thermal Resources (CTR) to bolster the mining firm’s efforts to extract lithium from California’s Salton Sea Geothermal Field.
Technically, it is a risky bet by GM because there is no full scale lithium production in the US from geothermal wells. The majority of the world’s lithium comes from two places: lithium brine deposits in Argentina, Chile, Bolivia; and hard rock deposits in Australia.
However, it does offer an outlook that the company is trying to think holistically about the challenge of becoming an EV only company by 2035.
According to Tim Grewe, general director of electrification strategy and cell engineering at GM, the direct expansion process of Australia’s Controlled Thermal Resources will have a “very small physical footprint” with fewer carbon emissions.
Electric vehicle batteries generally use lithium carbonate or lithium hydroxide but nowadays, the industry talking about a lithium carbonate equivalent that contains both.
Grewe said, “Lithium is a crucial metal to make these affordable high mileage electric vehicles in our future. We’re gonna have the first rights for the lithium produced out of this project.” As per GM, a “significant amount” of the lithium it needs for its EV batteries will come from CTR’s “Hell’s Kitchen” development site in the Salton Sea Geothermal Field which is located in Imperial, California. Note that the California Energy Commission estimated the area could produce 600,000 tons of lithium carbonate annually which is worth $7.2 billion.
Earlier this month, Rod Colwell, CEO of CTR, told Fortune, “It’s the single largest lithium brine resource in the United States, if not on the planet… It will be a critical hub.” Technically, the investment won’t have a payoff immediately as the first stage of CTR’s project is not expected to yield lithium until 2024. However, Grewe said GM will try to synthesize the lithium for its batteries as “quickly as it can, trying to beat ” deadline. The race of finding new and environmentally friendly sources of lithium in California is being called as “white gold rush.”
This demand has also triggered concerns about shortages and analysts have forecasted deficits in the tens of thousands of tons by 2022. Note that CTR is not the first company to try to pull minerals from the naturally heated waters deep beneath the Salton Sea. Simbol Materials, a hyped start up collapsed in 2015 shortly after Tesla offered acquisition at $325 million. Since then, Tesla says it mines mine its own lithium from clay deposits in Nevada.
Chris Berry, president of House Mountain Partners and an analyst who focuses on energy metals supply chains said “I’d say the main concerns around lithium extraction from geothermal brines are mostly economic. Investors want to see proven economics before writing big checks to develop projects and battery manufacturers want to see proof of scalable production of battery grade lithium before entering into binding off-take agreements.”
As per GM’s own analysis, it is taking the risk worth taking. Recently, GM announced that it would spend $35 billion throughout 2025 on the development of electric and autonomous vehicles including two new battery facilities in the US. It seems the company is trying to position itself as the largest manufacturer of EVs in North America.