Tim Burmeister Jun 24, 2023
American Battery Technology Co. is taking a multifaceted approach to meeting the growing demand for lithium in the years ahead. They have a battery recycling facility, they have the Tonopah Flats lithium mine project by the town of Tonopah, Nevada, and they have been developing processes for battery recycling and lithium extraction which CEO Ryan Melsert says are both environmentally conscious and cost-effective.
The company keeps getting good news. The federal government has awarded ABTC three multimillion-dollar federal grants, one in 2021 and two in 2022. Melsert said in April that in the coming months the recycling facility would be a cash-flow-positive operation, and those profits will help to fund the development of Tonopah Flats. In February ABTC announced the results of a third-party audited inferred resources report on Tonopah Flats.
“Their conclusion is that there is over 15 million tons of lithium on a carbonate basis that is economically accessible, and their conclusion is that makes this now the largest known lithium resource in all of the U.S.,” Melsert said.
With the environmentally conscious processes planned for the mine the permitting process has been steadily progressing, and Melsert said the mine may begin producing lithium on a commercial scale in 2025.
The early days
Melsert and others who are now part of the ABTC team moved to the Reno area in early 2015 to become part of the Tesla team in Nevada.
“We started off as part of the initial design team that helped to design and build the first Tesla Gigafactory here in Reno,” Melsert said. “We were tasked with building the biggest factory in the world to make the lowest-cost batteries in the world, and to do so using intentionally not off-the-shelf components. We were encouraged to do ground-up designs, to do first principles, physics-based studies, to make sure we were implementing systems because they were the best technologies to use, not just because they were convenient or already existed.”
He said when he joined Tesla there were only about 15 people in the whole Nevada Gigafactory division.
“It really did feel like a startup company, even though we were part of a larger parent,” Melsert said. “And then a few years later we walked into the Gigafactory one day and saw that there were 12,000 people in the building. So we felt like we grew the Nevada Division from a startup into an established company. And it’s that escalation, it’s that growth of a business that we find exciting.”
In 2019 Melsert took on a new challenge and became the chief technology officer of American Battery Metals Corp. A group from Tesla joined Melsert at the company, which later changed its name to American Battery Technology Co.
Battery recycling
“We decided to form ABTC to take our skill sets that we’ve learned on how to manufacture batteries and essentially design a process of how to do the reverse,” Melsert said.
“We saw different recycling techniques out there which were very brute force and very simple. Take a whole battery and drop it in a furnace. Take a whole battery and drop it into a shredder. Kind of non-strategic approaches that physically worked, but we thought there was a lot of opportunity left on the table.
“What we’ve done now is design an integrated process for the recycling of lithium-ion batteries. We’ve used a lot of the techniques that we developed at the Gigafactory, but we’re now able to run them in reverse order to much more strategically and systematically deconstruct and de-manufacture batteries, recover each of the individual elements, and then return them back to battery grade and sell them back to the domestic market.
“That allows us to get much higher recovery efficiencies than usual and to have much lower operating costs by having a strategic system where we don’t have very high thermal loads, and we don’t have very large amounts of chemical consumables needed,” Melsert said.
The process recovers lithium plus 10 other products from the batteries.
In October 2019 ABTC was selected to be part of the Greentown Labs/BASF Circularity Challenge accelerator program for battery recycling. Nearly 100 startups from more than 20 countries applied to the Circularity Challenge. ABTC was one of the five companies selected to participate in the program, and finished as the sole winner of the Circularity Challenge.
In November 2021 ABTC received a competitively bid $2 million contract award from the United States Advanced Battery Consortium, in collaboration with the U.S. Department of Energy, for the commercial demonstration of its integrated lithium-ion battery recycling system.
In November 2022 ABTC was awarded a close to $10 million grant under the Bipartisan Infrastructure Law to demonstrate and commercialize its techniques for lithium-ion battery recycling. It was one of five companies selected for competitive funding under the battery recycling portion of the “Electric Drive Vehicle Battery Recycling and Second Life Applications” opportunity from the U.S. Department of Energy.
ABTC and its partners contributed an additional $10 million in cost-share resources, bringing the total project investment to $20 million. ABTC’s partners included the Novonix Group, University of Nevada, Reno, University of Utah, North Carolina State University, National Renewable Energy Laboratory, Argonne National Laboratory, and Idaho National Laboratory.
In January 2023 ABTC announced the hiring of a leadership team for the company’s battery recycling facility.
In March 2023 ABTC agreed to purchase a move-in-ready, commercial-scale battery recycling facility in an industrial area east of Reno. The 137,000 square foot facility, which was vacant at the time of purchase, was previously used for recycling lead-acid batteries.
Lithium processing
With good recycling processes in place, eventually we should get to the point where the batteries powering our world will be an almost closed-loop system, with materials from recycled batteries providing almost all the materials needed for new batteries. But before that happens, a lot of lithium and other battery metals will need to be produced from mines.
As the demand for lithium for batteries grows, the gap between lithium supply and demand is expected to grow dramatically in the years ahead. And although a number of lithium projects in the United States are in various stages of development, so far the only producing lithium mine in the U.S. is still Albemarle’s Silver Peak brine lithium mine southwest of Tonopah, which produces less than 1% of all the lithium produced globally.
“The U.S. really isn’t a player in the business right now,” Melsert said.
Much of the lithium produced in the world comes from hard rock ore, primarily in Australia, or from lithium-bearing brines, primarily in South America.
“In the U.S., we don’t have huge amounts of lithium-bearing hard rock ore, and we don’t have huge amounts of lithium-bearing brines,” Melsert said. “But what we do have is very large quantities of lithium in a sedimentary claystone resource. And people have looked at it for decades, but haven’t ever been able to come up with an economically competitive technology to access the lithium in this claystone.
“So about two years ago, we started looking into it, and we intentionally didn’t use the existing processes. We forced ourselves to start with a blank page to really look critically, to look with first principles physics again. And the design we came up with is very different from what’s out there today. It’s even very different from other Nevada processes.”
Thacker Pass and Rhyolite Ridge are two of the most advanced lithium projects in Nevada.
“Both of those use very large amounts of acid,” Melsert said. “They have to get solid sulfur trucked in, and burn the sulfur on site to make sulfuric acid to then use in their processes.
“And early on, we decided that was something we didn’t want to do. So we’ve developed a technology that does not require large amounts of acid and does not require a sulfur combustion plant on site.”
Melsert called the acid process a “brute force” process.
“You dissolve the claystone, you dissolve all the support material, you dissolve all the lithium, and then you make this complicated solution,” Melsert said. “And then you have to separate the lithium from that complicated solution one step at a time. And then once you’ve done that, what’s remaining is all of the other claystone materials and the sulfate from the sulfuric acid. And that’s what becomes your tailings.
“What we do instead is, we found a way to liberate the lithium from the claystone, while leaving the rest of the claystone in solid form. And then that lets us simply filter out the lithium depleted solid. And the solution made is much simpler.
“So because we don’t dissolve the claystone itself, we don’t need large amounts of acid, and then all of those elements that would otherwise end up in the tailings are still just in solid form and can be returned to the deposit.”
In January 2021 ABTC was awarded a $4.5 million grant from the U.S. Department of Energy’s Advanced Manufacturing Office to work in collaboration with DuPont and the University of Nevada, Reno to build and operate a multi-ton per day demonstration-scale system of its lithium extraction process.
Melsert said in April that they were about halfway through that demonstration project. They have been taking thousands of pounds of material at a time to their laboratory at the University of Nevada, Reno, where they go through the process and make battery-grade lithium hydroxide.
“We’ve already sent samples of this battery grade lithium hydroxide to the very large chemical companies, our prospective customers, and have received validation back that our product meets all of their requirements,” Melsert said.
ABTC’s technology team has been working at the Nevada Center for Applied Research at UNR since March 2021. By the summer of 2022 they had expanded from a single laboratory to five private and shared laboratories totaling over 3,000 square feet.
“American Battery Technology Company is demonstrating tremendous leadership in the development of technologies and a new energy economy on the campus of the University of Nevada, Reno,” University President Brian Sandoval said. “Through the creation of jobs and internships, they are giving new experiences to our students and contributing to the preparedness and diversity of our future scientists and the nation.”
ABTC plans to deploy and install their pilot plant this summer, and then begin operating the pilot plant in the fall. The pilot plant will be able to handle about five tons per day of claystone material.
With the success of the pilot-scale project, ABTC applied to the Department of Energy for a grant for building a commercial-scale lithium refinery at Tonopah. In October 2022 ABTC, in collaboration with grant partners DuPont Water Solutions, University of Nevada, Reno, and Argonne National Laboratory, was awarded a $57 million grant from the DOE for the refinery. The grant will cover about half of the projected $115 million cost of the lithium refinery.
In April ABTC engaged global critical infrastructure solutions company Black & Veatch in a technical services agreement to support the design, construction, and commissioning of the lithium refinery. Melsert said ABTC received bids from more than a dozen of the largest premier construction firms in the world.
American technology
The $57 federal grant for ABTC’s lithium hydroxide manufacturing facility was part of the first phase of over $7 billion provided by the President’s Bipartisan Infrastructure Law for the battery supply chain. President Joe Biden held an event at the White House in October to announce the grants and talk with the battery award recipients.
“The Infrastructure Law also invests in people and companies that are going to build our future, like electric vehicles and advanced batteries that are going to power those vehicles,” Biden said. “This is critically important, because the future of vehicles is electric, but the battery is a key part of that electric vehicle. And right now, as the folks on the screen can tell you, 75% of that battery manufacturing is done in China. And for some battery components, critical materials, China controls nearly half the global production.
“But China’s battery technology is not more innovative than anyone else’s. In fact, our national labs, our research universities, our automakers led the development of this technology here in America.”
Biden asked Melsert to “tell us about why you’re confident in the outlook for the U.S. battery market.”
Melsert said multibillion dollar electric vehicle factories and electric battery factories are being built in the U.S., but in the current market, almost 100% of the materials which will be used in those factories would need to come from outside the U.S.
“It makes the U.S. and U.S. industry very vulnerable to be that reliant on outside materials,” Melsert said.
“So the built-in demand is already there in the U.S.,” Melsert said. “We have great relationships with the cell manufacturers and the vehicle manufacturers who are really hungry to buy these materials from U.S.-based resources.
“And up until now there really has been a need for much greater innovation to put the effort in to go for first-of-kind system development, and the willingness to take risks to bring a new type of resource to market. And I think that’s always been one of America’s strengths, to take that risk and build these first-of-kind systems. And like I said, we’re happy that you and the country are taking this risk with us.”
“We’re happy you’re doing it and happy for your innovation,” Biden said. “Thank you.”
Talking about the lithium market in April, Melsert said there are several issues which will arise if battery manufacturers have to import their lithium. That could make the lithium more expensive, there could be supply security issues, and there could be environmental issues if the lithium comes from countries which have mining practices which are not environmentally conscious. Also, purchasers of electric vehicles may not be able to get federal subsidies if not enough of the critical minerals have been sourced domestically.
“Many of those multibillion-dollar battery factories will be coming online in 2025 and 2026,” Melsert said. “And right now our Tonopah lithium refinery is scheduled to come online in 2025 and 2026. So the timelines are pretty well synced for us to have high volume production right as there’s high volume domestic demand.”
The first phase of production at Tonopah Flats is expected to produce about 30,000 tons per year of lithium hydroxide, Melsert said.
Mining lithium
ABTC’s Tonopah Flats Lithium Project includes 517 unpatented lode mining claims on about 10,340 acres of Bureau of Land Management land in the Big Smoky Valley near Tonopah. ABTC began surface sampling of the claims in the summer of 2021, and since then has performed multiple drilling programs totaling 12,000 feet of exploration covering about 65% of its property.
Melsert said that since their lithium extraction process is less expensive than some other processes, and does not involve the expense of building a sulfur combustion plant, it will work for them economically to produce lithium even from claystone which has relatively low concentrations of lithium. He said they should be able to economically produce lithium from claystone with as little as 300 parts per million of lithium.
Which works out well for ABTC, since in their exploration of Tonopah Flats so far they have found that almost all the samples have had a lithium concentration of at least 300 ppm.
So far they have drilled as deep as 800 feet. The samples have shown lithium concentrations ranging from around 300 ppm to over 2,000 ppm, with an average concentration of 561 ppm.
Melsert said that in all their samples, there was virtually no material with less than 300 ppm lithium.
“So the entire depth of the sampling locations has lithium in a form of which we can recover it in an economic fashion,” Melsert said.
The resource will be more clearly defined with more exploration drilling in the months ahead.
The third-party audit completed in February said that based on the exploration results so far, Tonopah Flats has an estimated 15.8 million tons of lithium carbonate equivalent which are economically accessible.
Melsert said the total global production last year of lithium carbonate equivalent was about 600,000 tons.
“So this resource itself can play a very substantial role in providing all of the lithium needs for all of the U.S.,” Melsert said.
The environmentally conscious lithium extraction process ABTC has developed is helping the project move through the permitting process relatively quickly, Melsert said.
“Because we don’t use large amounts of acid, we don’t have combustion on site,” Melsert said. “We don’t have a large tailings pond. That really does reduce the timeline to develop the resource itself.
“Last year we went through the permitting process for the pilot plant in Tonopah and were able to receive all of our permits necessary to build and operate the pilot plant. And right now we’re going through about the same process as last year, but now for a much larger commercial scale facility.”
Some renewable energy projects have also been going through their permitting process in the Tonopah area, Melsert said.
“We’re right next to the Crescent Dunes concentrating solar power plant,” Melsert said. “They went through some environmental studies a few years ago right in the same valley. And we get to essentially use that as a starting point and just expand on their analysis, which also helps with our time to market.”
Some lithium projects have been running into issues with concerns over flora and fauna and cultural heritage. Melsert said they haven’t had those issues with their site near Tonopah.
The Tonopah Flats site is at the intersection of two of central Nevada’s major highways, and it is also at the intersection of two high voltage transmission lines.
“That gives us a good head start on the infrastructure needed to bring this deposit to the market very quickly,” Melsert said.
People in the local area have been supportive of the Tonopah Flats Lithium Project, Melsert said.
“It’s an area that has a long history of supporting the mining industry,” Melsert said. “Tonopah is a town with a very long history of mining operations, mostly silver and gold operations. And they are excited to have a new type of mineral resource be developed near them.”
ABTC, which is based in Reno, opened its Tonopah satellite office in the spring of 2022.
“A few members of our team are based there and have grown up in the area. So we don’t feel like we’re an outside company moving into Tonopah. We already feel like we’re members of the community.”
“There are only a handful of locations in all of the U.S. with promising lithium deposits that really can make a difference going forward,” Melsert said. “The USGS has identified only five areas, and two or three of those are having serious, either local concerns or environmental concerns.
“Central Nevada specifically is the premier area to start producing battery-grade lithium products to make a difference to the US economy. We as a country need to start producing at least some of our own lithium products, and there aren’t that many areas that are good contenders. So it’s important that we’re able to move this product to market here.”
