Global demand for lithium is rising fast, and ways of extracting deposits are being developed. The Salton Sea region is a polluted district in Imperial Valley, California, that has grinding poverty among local Latino farm labourers and others. Chronic bronchial illness caused by toxic dust blown around the area is common. Successful lithium extraction means the area could have a brighter economic future. Previous prospectors looking to exploit the area have been and gone. Lars Carlstrom, CEO of Statevolt, is a man who believes in the area enough to plan to build a $3.5 billion gigafactory there. He is planning to build another one in Italy.
The California Energy Commission estimates that the area could produce over 600,000 tons of lithium carbonate a year. That is enough to potentially be developed into a robust domestic supply, according to the US Department of Energy’s National Renewable Energy Laboratory (NREL). Some are already calling the region Lithium Valley. A report from NREL in 2021 estimated that lithium-rich geothermal brines in the Salton Sea region contain up to 400 mg/kg lithium.
The saline lake known as the Salton Sea is drying up and shrinking. Drought, fuelled by climate change, is further dwindling its inflow from the Colorado River basin. As the lake evaporates (no, it is not a sea), its solution of pesticides, chemicals and heavy metals is becoming more concentrated.
The Salton Sea gigafactory
Several companies are prospecting and setting up production there. In January, US start-up Statevolt acquired 135 acres for a 54GWh gigafactory, where it plans to manufacture transportation and stationary storage batteries, using domestic supply chains for lithium and other needs.
The battery cell plant will be technology-agnostic and use modular production. That will create versatility, enabling the manufacture of a variety of battery products, according to Carlstrom. That could include lithium, as well as solid-state or semi solid-state and 3D printed batteries, which they are now keenly exploring with a partner in California. He chuckles when asked if it is Sakuu and declines to confirm.
He is hopeful that they will be able to break ground on the factory in August or September 2023. The idea is to have the first battery cells in production 18 months later. Eventually plans foresee the factory being able to produce 650,000 batteries annually, which would make it one of the largest of its kind in the US. And if the gigafactory is successful, he will launch pilot projects across the US, he said. “We’re creating a blueprint in the US and can roll it out.”
The need for energy storage systems in the US is huge as the electricity grid is not as well developed as in Europe, Carlstrom said. His companies are talking to electric vehicle manufacturers, who would want to assemble the cells into packs themselves, but said they could also make packs if required.
The plan is for the lithium to be sourced from the brine beneath the salt flats around the Salton Sea area. Statevolt entered into a supply agreement last year with Australian company Controlled Thermal Resources (CTR). It will provide the lithium needed using geothermal power from their Hell’s Kitchen Lithium and Power plant.
Technology status
CTR says its Hell’s Kitchen Lithium and Power project is in the heart of one of the largest known geothermal resources in the world. It claims the Salton Sea Geothermal Field in Imperial Valley represents “a proven and defined” geothermal power and mineralised brine resource.
But locals claim different. At an online meeting of the Lithium Valley Commission, Faron Owl of the Fort Yuma Quechan Tribe, whose reservation lies to the southeast of the Salton Sea, raised concerns about the mining plans. “Toxic wastes, the gas emissions, the pollution are being put aside for the lithium demand,” he is reported to have said, while the state and federal governments ignore the “underlying concerns of land, air and water.”
Reuters reported the plant owned by CTR would use 10 tons of water for every ton of lithium produced. Some residents worry this water use could accelerate the decline of the Salton Sea.
Carlstrom said the industry in itself is not causing any significant pollution and in the long term, he foresees hydrogen trucks operating in the area. “All this new green industrialisation will also contribute to cleaning up the area. I see this as the only way forward for Imperial and the way to create a sustainable and healthy place to live.”
Massive mining expansion
The companies vying to massively expand lithium mining at the Salton Sea – Berkshire Hathaway Energy, Controlled Thermal and EnergySource Minerals – claim they will use a relatively new process called direct lithium extraction (DLE), by which lithium is drawn from underground brine using filters, beads, solvents or sorbents.
Proponents of DLE say it saves time and money and is less environmentally damaging than evaporation brine mining used in South America. Ten years ago, Simbol Materials built the first demonstration plant at the site, but it reportedly folded after a failed acquisition by Tesla. More recently, a company called Lilac Solutions — aided by millions of dollars from millionaire investors Jeff Bezos, Michael Bloomberg and Bill Gates — tried its hand at DLE at the Salton Sea. This August, the company reportedly deemed the hot, toxic brine too difficult to handle for both equipment and workers, calling the region a “graveyard for lithium extraction.”
Carlstrom said: “I heard about that story; however, we are confident that CTR have managed to control the process with their technology. The hyperlocal concept is a huge benefit for the project but it’s not a dealbreaker for Statevolt.”
In late 2021, CTR started drilling the first well for the Hell’s Kitchen Lithium and Power project. CTR has also previously signed supply agreements with US vehicle manufacturer General Motors and Dutch electric vehicle battery manufacturer Stellantis, as well as Italvolt, Statevolt’s sister company.
Third-party tech provider
Carlstrom said Statevolt has chosen to partner with a third-party technology provider rather than attempt to develop its own technology as it is cheaper and mitigates risk. For their partner, it adds capacity for their products so is a win-win for both, he said. The geothermal aspect of CTR’s project – where the hot brine rises to the surface from a depth of 2,500 metres – has inspired another line of thought in Carlstrom for Italy.
It is a land of volcanoes, where Italvolt is also working to establish a gigafactory. He is now looking at developing geothermal energy in Italy as a separate business.
He has also had serious discussions in Iceland, a country with plentiful geothermal activity including volcanoes and geysers, and lots of land for a gigafactory. He already has his hands full with two gigafactory projects so is not actively pursuing it, he said.
Why does he think he will succeed at the Salton Sea when so many others have given up? He said: “The new green industrialisation is something no-one living today has ever experienced, the biggest opportunity in a hundred years. California in general is the most developed state when it comes to green energy and the highest adoption of electric cars, a driver for new innovations.
Igniting local prosperity
“Gigafactories are the leaders in establishing prosperity and these factories should be built in areas in decline to ignite the economy. Imperial represents all this, the most rewarding place to make it all happen again,” said Carlstrom.
Keeping a lid on overhead costs and having a network of proven technology partners are also added bonuses for him.
He said sustainability and the environmental impact of gigafactories are very important, but his big interest is their social impact, with a huge opportunity in this regard. “That’s what’s firing me, it’s the social impact and less so the environmental impact. I see a huge opportunity to change our society. Especially in establishing these factories in areas in serious decline, like Imperial, which is the poorest area in America,” he said.
He believes the transition from ICE to electric vehicles will cost “millions of jobs” and they need to be replaced or they will be lost. “So, if you don’t have these gigafactories ready – as they put up some quite tight timelines of 2030 – 2035 … to pick up these jobs, they will end up in China.”
He said politicians need to understand the seriousness of this and the risk of recession in Europe if 12 million automotive jobs are not secured during the transition to net zero. Securing those jobs and securing gigafactories need to be accelerated, he said. His gigafactory companies are engaged with universities and colleges in Italy and the US to create upskilling programmes, both for youngsters entering the industry, but also older workers being laid off from ICE production.
Project status
Carlstrom said the 135-acre site for the 54GWh gigafactory is secured, and Statevolt is in talks with OEM and storage operators for potential contracts. “Samples will be produced in 8-10 months. We’re working on a pilot line.” Factory construction is due to start in September 2024, Carlstrom said.
He is still talking to investors, including private equity investors, investment banks and institutional investors “which might include pension funds”, though he declined to confirm names or whether agreements were falling into place. He said he has invested some private money; $5-10 million has come in from private equity. Engineering and geological surveys have cost around $10 million in Italy and a bit less in California, as lessons have been learnt from Italy.
Sister company Italvolt is licensing battery technology from Israeli battery company StoreDot and is sharing it with Statevolt.
Statevolt will employ around 2,500 people when up and running.
The Italian connection
Italvolt, of which Carlstrom is also CEO and Chairman, plans to open its gigafactory in 2025. The plant is expected to cover more than 300,000 m2 on a site more than three times this size. The plan is it will employ around 1,600 people and have a production capacity of up to 45GWh per year. At present, five people are employed by the company and it has a team of 50 consultants on hand. Investment is expected to be €3 billion, said Carlstrom. The company is talking to 4-5 investors at present from Germany and Scandinavia.
The project would be split into three – it’s important to ease nervousness among financiers. The collapse of the UK’s Britishvolt (which Carlstrom co-founded and left after disagreeing over strategy) has made the financial community nervous and changed the risk attitude to gigafactories, even over the past 12 months, he said.
Olivetti site rejected
A production site, a former Olivetti facility, had been found in Scarmagno and Romano Canavese in Italy’s Piedmont region. However, Carlstrom confirmed the site is not suitable due to heavy pollution – asbestos is reported, although a non-disclosure agreement prevents him from confirming this – so the hunt is on for a new site elsewhere in Piedmont, as well as in southern Italy.
Despite this setback, he said the business is fine and is even thinking about accelerating its time to market with production in early 2024. It has identified an existing building they could take over and move into, he said. That would get around the need for building permits – not a quick process in Italy.
Battery cell formats
The lithium-ion cells it is planning to produce will be in three main formats: pouch, prismatic and cylindrical. They will have a host of applications, from electric vehicles to industrial machinery and utility-scale storage. Carlstrom said they will aim at the high-performance car market such as Lamborghinis, and Mercedes in neighbouring Germany.
The battery cells will be based initially on NMC811 technology for the first two production lines. It is working on a pilot line and will produce samples towards the end of 2023. The samples being produced now come from a StoreDot partner in China.
The process of agreeing the joint venture with StoreDot was long and difficult, and took longer than expected, said Carlstrom. “Especially from a legal perspective – it’s the legal process that comes last. You need to cover a number of areas doing a joint venture: licensing is very difficult and very advanced, and so this took a year to carve out this agreement.” He has a very good working relationship with StoreDot’s CEO, Doron Myersdorf, which helped the process along.
The lifestyle in Italy to attract workers from abroad and a skilled domestic workforce means there is a good supply of talent for a gigafactory there, said Carlstrom.
The small matter of tax
Carlstrom was ordered to do 60 hours’ community service – church cleaning – by a Swedish court after being convicted of tax fraud in 1993. He said the matter was an error, not fraud, and came about as his accountant failed to file a tax return for value added tax on time. “Today, it would be considered nothing,” he said, adding the Swedish authorities were like a dictatorship in those days when it came to tax.
