Rio Tinto-backed startup nears USD 19 mn funding amid lithium market challenges

Despite a sluggish global lithium market, Melbourne based lithium technology startup ElectraLith, backed by mining giant Rio Tinto, is on track to close a second funding round, raising AUD 29m (USD 20m), said CEO Charlie McGill, speaking to Reuters on Thursday. The oversubscribed round, mentioned as a big win for challenging venture capital and commodity market conditions.

Pioneering a groundbreaking filtration technology, Direct Lithium Extraction-Recycling (DLE-R), ElectraLith is extracting lithium from brine deposits for the first time without water or chemicals. Especially suitable for the arid regions in which the process is being developed, in Chile and in its Atacama Desert for example, the process is designed to mitigate the environmental drawbacks associated with current lithium extraction methods.

“We’re excited to be closing this funding round while navigating market headwinds, as the opportunity to enable DLE technologies is truly transformative,” said McGill. But race is on among firms including Exxon Mobil that aim to commercialise DLE, a technology that could change the face of lithium production, cutting the time it takes to process from months to hours and depleting need for evaporation ponds or open pit mining.

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ElectraLith’s proprietary DLE-R process filters brine through two specially designed membranes to remove lithium and convert it to lithium hydroxide. Local water resources are preserved by re-injecting the remaining brine into the aquifer. The company is focused on scaling the membrane technology to larger projects but while maintaining performance, said McGill, who retains all commercial rights to the process.

The money raised will be used to develop ElectraLith’s first pilot plant at Río Tinto’s Rincon lithium project in Argentina, which is expected to be operational within approximately a year. Two other pilot plants are also planned. Venture capital firm IP Group and Rio Tinto each have part ownership in the company along with the Monash University where the technology was developed by Professor Huanting Wang.

ElectraLith claims its process can produce lithium hydroxide at approximately half the cost of competitors, a crucial advantage in water-scarce regions. “Water scarcity is a major challenge near lithium mines,” McGill said, highlighting the company’s collaboration with Mandrake Resources in Utah, where water permits are unattainable. “Our technology eliminates the need for water entirely,” he noted, underscoring its environmental and economic advantages.