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Feature: Extracting lithium -- today's gold -- from oilfields

New York (Platts)--2 Feb 2018 932 am EST/1432 GMT


Jared Lazerson, CEO at MGX Minerals, is quick to acknowledge that sources of lithium are abundant -- and he should know, because his company will soon be bringing more to market.

"It's all about finding the right location and applying the right technology," Lazerson, who is also the company's president and a director, told S&P Global Platts in a Wednesday interview.

While MGX may have been founded as an industrial minerals company, it is more of a tech company than a miner. And it's nearing the start-up of its first commercial-scale operation.

Vancouver-based, MGX's Lazerson Wednesday maintained the company has "first-mover" advantage with a "low-cost, low-energy, modular" process that rapidly concentrates lithium and other minerals from the brine associated with oilfields and industrial wastewater.

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"We recognized that the oil and [natural] gas sector produces more lithium than anyone in the world, but was throwing it out," he said.

Lithium is one of the main ingredients of the lithium-ion battery used for electric vehicles and has been on a bull run since 2015. Production increased substantially in 2017 with a flurry of new investors bringing capacity on stream, so there's no sign of deficit, but lithium prices doubled in 2016 and remain lofty.

As the last 10 years have seen the development of hard-rock lithium mines in addition to the more traditional saline flats mine operations, the extraction of lithium from oilfield brine and wastewater has also evolved.


NANOFILTRATION UNDERPINS THE TECHNOLOGY


A basic technology is solar evaporation -- a process largely confined to desert areas, especially in South America -- where it can take up to two years to evaporate wastewater before extracting a concentrated lithium feedstock that can be further processed.

"We focused on a technology that could produce lithium in a day, or less than a day, versus the 18-24 months traditional solar evaporation takes," Lazerson said.

At the heart of MGX's proprietary process is nanotechnology -- advanced nanomaterials, specifically nanofilters, used along with nanoflotation processes. This nanofiltration approach allows the separation of oil, ore, water, and other physical pollutants.

"The science is in -- the secret sauce, if you will -- the filters themselves and the chemistry," Lazerson explained. "We have specialized re-agents for each element. They don't look any different than any other industrial filter, but this is patented, proprietary technology."

The result, he emphasizes, is a low-cost, quick, high-recovery process that is easily scalable. "If there is a need to extract and concentrate more," Lazerson noted, "just add a series of filters."


PETROLITHIUM


The company has acquired more than 2 million acres of brine-bearing formations in North America and just recently ventured into Chile. "The real prize is in South America," Lazerson said.

This is where there is higher value -- up to 1,000 ppm of lithium compared to other brine formations in North America where, typically, 300 ppm is present. Its North American lithium holdings are in Alberta, Canada and Utah in the US.

Earlier this week, MGX said that its operating partner received approval from the State of Utah Division of Oil, Gas & Mining to conduct a 3D geophysical survey on the Blueberry Unit at its Paradox Basin Petrolithium Project.

"The project represents the first large scale integrated petroleum and lithium exploration project in the United States and is located proximate to the Lisbon Valley oilfield within the Paradox Basin, which has shown historical brine content as high as 730 ppm lithium," MGX said.

MGX has a number of partnerships in place with oil and gas operators to conduct well sampling. The company notes in presentations that nearly 20 million barrels of oil and gas are produced each day throughout North America. The US accounts for about 65% of this output, followed by Canada (25%) and Mexico (10%).

As oilfields age, brine-to-O&G ratios rise exponentially; For every unit of O&G produced, four to five units of brine are pumped, and the North American O&G industry generates an estimated 80 million-100 million barrels of brine daily.


CLOSING IN ON COMMERCIAL STARTUP


The company has been running a pilot plant since last August and is now "just days away," from starting up its first commercial operation, according to Lazerson. Located in Calgary, the plant will produce about 750 b/d of lithium carbonate, which is the feedstock for lithium hydroxide that finds its way into EV batteries.

Lazerson acknowledges that initially the commercial operation will represent a modest, roughly $500,000/year revenue stream, or about $3/b. Costs, however, are less than $1/b.

As important, he noted, is how MGX is prepared for the shifting energy economy that's emphasizing clean technology. The byproduct of extracting minerals such as lithium, magnesium and silicon from brine is clean water.

"The shift in energy from fossil fuels to clean fuels is happening now, it's under way. The cleanup part of this transition is not a one-off. It represents a fundamental shift that is also being widely backed legislatively," Lazerson said. It will take time, he pointed out, but time is an ally -- because during the long-term transition there will be many opportunities.


OTHER PROJECTS


MGX also controls three high-grade silicon projects in British Columbia and says there are no current producers of silicon in western North America. The company is evaluating the economic viability of producing silicon metal from high-purity quartzite.

MGX is also building North America's next magnesium oxide mine in the Driftwood mining district, about 100 miles north of Cranbrook, British Columbia.

And while MGX is sharply focusing on lithium, Lazerson told Platts it even has gold and other precious metals in its sights.

"It's an exciting time for mineral extraction technology," he said. "With brine, there is no blasting, no crushing. The byproduct is clean water.

"It's all about the concept," he said. "We're resource agnostic. We won't fall in love with any particular location or brine formation. It's all about what resource best fits with the technology."

--Joe Innace, joseph.innace@spglobal.com
--Edited by Richard Rubin, richard.rubin@spglobal.com




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