Sunrise over the Salar de Uyuni in Bolivia (source: Vladimir Krupenkin)
Today, MGX Minerals Inc. made an announcement that has the ingredients to change the lithium industry as we know it. MGX and its technology partner, PurLucid, made ground-breaking progress in treating complex brines with high magnesium content. Their technology tested bulk lithium brine samples from a US site with very high magnesium levels (76,000 mg/L): The pre-treatment process successfully removed all of the magnesium to non-detectable levels (less than 1 mg/L).
This sounds like a game-changer for the lithium and electric vehicle industries because this feat was achieved with a low energy, low cost process under patent and patent pending applications.
There exist vast quantities of lithium-containing brines with high magnesium content in South America, USA, Canada and China. For example, although Bolivia does not produce any lithium as of today, it is called the “Saudi Arabia of Lithium“ because its still-untapped salares contain about half of the world‘s estimated lithium reserves – but typically have high Mg-Li ratios (Bolivia‘s Salar de Uyuni has about 3 times as much magnesium as Chile‘s Salar de Atacama). MGX‘s CEO, Jared Lazerson, explained:
“Magnesium in brine, often referred to as hardness in water, has traditionally been one of the major issues in processing of lithium concentrate. The lithium magnesium ratio was traditionally one of the primary factors in consideration of the viability of lithium brine projects. One of the major factors in development of South American brine sources was the relatively low magnesium content. Alternatively, high magnesium content brine sources have been slow to develop such as those in the United States, China, and the Middle East for this reason. Removal of very high levels of magnesium opens up a large number of global lithium brine sources for consideration that were previously considered too high in magnesium. This represents a triumph of technology over perceived resource quality, in particular, that the magnesium has been extracted in a common form of widely used industrial mineral compound.”
Changing industry practices and widely used perceptions is a big thing.
For long time, brines with high magnesium content have been considered of inferior quality and have therefore been largely ignored. MGX now values such brines completely different, because the company can not only remove the magnesium but extract it in a saleable form: Magnesium hydroxide.
MGX‘s technology has the potential to make some of the world‘s largest lithium occurences viable for production and change the supply picture of the market. In order to do that, MGX needs to show commercial viability. As announced today: The buildout of the first commercial brine treatment system for rapid lithium recovery is near completion.
The first system, called NFLi5, will be ready for deployment next month in November. This unit has a capacity of 120 cubic meter per day, or 750 barrels of water per day. In case the NFLi5 unit shows commercial viability, much larger units will be built and commissioned.
Thanks to a recent investment by MGX, PurLucid has opened a new commissioning facility in Sherwood Park, Alberta, where multiple units will be assembled and commissioned simultaneously. The new facility also allows for in-house research and development.
On top of the first petrolithium system to be commerially deployed next month, MGX is also fabricating units only for water treatment (i.e. without the lithium extraction process) for deployment in the Alberta oilfields. Three additional commercial systems are now being built and PurLucid expects to deploy the first unit in late 2017, with subsequent units to be deployed in early 2018.
According to today‘s news, MGX is seeing strong interest from petroleum and environmental companies throughout North America for cross applications of technology in water treatment with or without the mineral extraction system.
MGX also provided an update on the status of commercial offtake agreements:
“Lithium chloride recovered from brine has been tested and accepted for upgrade to lithium hydroxide based on previously shipped samples to MGX’s UK based upgrader. Lithium hydroxide is the primary form of lithium used in lithium-ion batteries as an electrolyte. Additional samples were shipped this week to a major consumer of lithium feedstock for evaluation. Negotiations remain ongoing for large volume off take.“
Lithium‘s Supply Problem
The global success of electric vehicles (EVs) will also depend on the number of EVs that can be produced by the industry.
If not enough EVs are produced to meet the projected demand, this will hamper growth and may even become an industry killer. One of the critical commodities needed in batteries for EVs is lithium, which is projected to be in a supply deficit in the next years.
How can that possibly be? Lithium is known to be abundantly available in many parts of the world. However, the problem of the lithium industry is not a shortage of the commodity itself but a shortage of processing capacities and capabilities.
Although salt brines are the most abundant lithium source available in the world, there are major limitations to the extraction of lithium, first and foremost due to the difficulty in processing brines with a high magnesium to lithium ratio (Mg/Li).
It‘s crucial for the extracted lithium carbonate to contain low magnesium content to avoid contamination in the downstream products.Traditionally, the high costs of reducing the magnesium content in brines to acceptable levels have made such projects uneconomic. Because magnesium and lithium cations have similar ionic properties, they are extremely difficult to separate from eachother.
Such additional costs vary directly with the Mg/Li ratio, and as such industry practice recommends a brine to have a Mg/Li ratio of less than 10 to be a profitable venture. MGX is on its way to put this ratio upside down as the they value brine deposits with a high Mg/Li ratio as the most attractive. The more, the better.
Just because the costs to reduce magnesium in high Mg/Li brines are so extremely high with conventional processes, the result is that only brines with low Mg/Li ratios are in production or being developed today. This represents an underutilization of existing lithium resources worldwide, especially as there is a supply deficit on the horizon. As such, there is a pressing need to develop and commercially deploy unconventional sources of lithium with new technology.
MGX is uniquely positioned to fuel the massive growth that Elon Musk (new Tesla Model S only $35,000), and now Volkswagen (+20 new electric models planned) are talking about, not to speak of China with its ambitious EV mandate.
MGX‘s low-cost nanofiltration and nanoflotation system appears to be much more flexible and robust than anticipated, and appears to be the solution to fuel run-away lithium demand under very tight long-term supply.
MGX Minerals Inc.
#303 - 1080 Howe Street
Vancouver, BC, Canada V6C 2T1
Phone: +1 604 681 7735
Shares Issued & Outstanding: 77,609,651
Canadian Symbol (CSE): XMG
Current Price: $0.81 CAD (10/13/2017)
Market Capitalization: $63 Million CAD
German Symbol / WKN (Frankfurt): 1MG / A12E3P
Current Price: €0.51 EUR (10/13/2017)
Market Capitalization: €40 Million EUR
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Report #1 “MGX Minerals Plans To Enter The Magnesium Market“
Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist. The author hold a long position in MGX Minerals Inc. and is being paid a monthly retainer from Zimtu Capital Corp., which company also holds a long position in MGX Minerals Inc.