BusinessNovember 4, 2020

Could NZ’s geothermal resources solve the world’s lithium mining woes?


Extracting raw materials for new technology like electric vehicles can take a terrible toll on the environment. So New Zealand company Geo40 has developed a process for sourcing strategic minerals from our abundant geothermal resources. 

Over four decades ago, Mike O’Sullivan, founder and COO of Geo40, did a high school project examining whether precious minerals could be extracted from the geothermal fluids prevalent in his hometown of Rotorua. O’Sullivan’s interest in minerals subsequently took him overseas and by the 2010s he was working in the mining industry in the Democratic Republic of the Congo.

Yet O’Sullivan was unsatisfied with modern mining techniques because of the environmental and societal upheaval they caused. So he returned to New Zealand and continued his teenage idea of extracting high-value minerals from geothermal fluids, setting up Geo40 alongside fellow founders Matt Suttcliffe and Adam Peren, who brought together a team of other experts and investors. They originally called themselves “Environmetals”.

The company’s aim was simple: sustainably extract highly valued minerals for a growing global market. In recent years, the demand for these strategic materials has boomed with the development of new technology: 5G mobile networks cannot operate without caesium, while lithium is a crucial constituent of batteries for cellphones, laptops and electric cars.

The catch is that some of these minerals can only be found in abundance in politically unstable countries – such as the DRC where O’Sullivan worked – or by undertaking environmentally damaging mining procedures.

However, with almost 15% of New Zealand’s energy coming from abundant geothermal resources, there was a potentially sustainable yet untapped supply. In geothermal energy, mineral-rich liquid is constantly being pumped from beneath the earth and its immense heat (upwards of 350℃) is used to generate electricity. The question Geo40 asked was could the minerals be drawn out from this liquid brine before it’s pumped back underground? After all, because extracting minerals from hard rock involves processes that convert it into a liquid first, it was as if a key step in the process had already been done.

(Graphic: Geo40)

It was a seemingly simple idea, but Geo40 CEO John Worth says it quickly met some complex obstacles.

“Every established technology Geo40 tried blocked up with silica, which is ubiquitous in geothermal fluid worldwide. It also realised that all geothermal operators hate silica. If they extract too much heat from the fluid in generating electricity, the silica blocks up the pipes.

“So while Geo40 wants to extract the high-value minerals, we have to get the silica out first, and this is a route to get access to geothermal power plants because the operators also want to get the silica out. It’s a natural marriage.”

Geo40 therefore pivoted to extracting silica – which is also an in-demand product – yet it kept in sight the ultimate prize of other high-value minerals. Once the team had a laboratory process, they created a small plant in the corner of a garage, before scaling it up tenfold and building two experimental plants each housed in three 40-foot shipping containers. One of these containerised plants moved around the North Island, while the other was sent to Japan to prove worldwide applicability.

(Graphic: Geo40)

But they needed to show that the process could work at scale and over long time periods. Fortunately Contact Energy and Ngāti Tahu Tribal Lands Trust were keen to work with Geo40 and agreed to let them test their technology further by permitting the company to create the Ngawha demonstration plant within the Ohaaki geothermal field. For the past two years, this plant has been producing 500 tonnes of silica per annum for sale to a range of customers across the globe, including a metal-casting company in Mexico that manufactures engine blocks for Ford.

Worth says the company’s progress was partly down to its grassroots garage engineering and willingness to break things.

“Around six years ago, it looked as if existing reverse osmosis technology was a viable route in silica extraction. Geo40 didn’t have much capital, but spent $20,000 on reverse osmosis membranes. It managed to melt them all within 12 minutes.

“At a big corporate, that’d probably be the end of your job. At Geo40, that’s just a shitty Tuesday, so then you dust yourself off and look at what you’ve learnt. Then in two weeks’ time you deploy a new approach and this time perhaps you’re able to succeed.”

Geo40’s production capacity will further increase with the completion of its northern plant in late November. It will produce 5,000 to 8,000 tonnes per annum and is also based within the Ohaaki field. One of Worth’s first jobs at the company when he came on board in August 2019 was to source funding for this plant. Fortunately the company received $15m from the Provincial Growth Fund and then found a number of private investors with the support of New Zealand broker Jarden to cover the additional $5m required for the plant, as well as ongoing running costs.

Geo40’s new Ohaaki northern plant (Photo: Supplied)

Some of Geo40’s new partnerships opened up new opportunities: Swedish energy company Climeon and partner funding company Baseload Capital recently invested $2.5m in Geo40. Baseload Capital is 22% owned by Breakthrough Energy Ventures, the climate-change investment fund of Bill Gates, Jeff Bezos, Jack Ma and other billionaire philanthropists.

Climeon was excited by the potential to gain more energy from geothermal plants if the silica could be removed, since a lot of heat goes to waste to keep the silica from blocking the system.

But it was when the Geo40 team was presenting to a prospective customer that Worth says they discovered another major opportunity of silica extraction.

“They [the customer] laughed and said ‘this is great, but you’ve missed the key point; if the silica can be removed and the liquid can be cooled, not only can you get extra generation, but you can capture some of the CO2 emissions – that’s the future!’”

The CO2 emissions of a geothermal plant can be almost as high as a gas plant, but Geo40 realised they could potentially capture the CO2 and sequester it back down into the ground where it stays permanently.

This next step, however, is dependent on the northern plant becoming operational and producing as much silica as possible. Geo40 can then grow its customer base for this silica, ensuring that the business will be profitable and sustainable. Worth has previously told media that Geo40 is eyeing up an NZX listing.

In the meantime, the progress continues with the company creating a process to extract boron from geothermal brines. It is now working with experts in the US studying a route to extract caesium – the critical element of 5G technology. The Department of Energy in the US is co-funding this work on caesium, which is in short supply with the world’s production monopolised by China.

However, the work that is gaining some of the most excited reactions from the worldwide community is Geo40’s work on lithium. Usual production of the mineral involves either sourcing mineral-heavy brine and drying it in large evaporation pools as they do in South America, or blasting it out of hard rock as they do in Western Australia. In fact, New Zealand has lithium deposits in the clays around Taupō and in hard rock along the West Coast of the South Island (as shown by a GNS survey in 2018), but mining these deposits would risk great environmental damage. The Geo40 approach of extracting lithium from geothermal brines is far more sustainable and less invasive.

Early signs of the extraction are good. Geo40 had a small test lithium plant running 24/7 for three months earlier this year and it managed to extract battery grade lithium from geothermal brines. Worth says that they are now working on scaling up to the next step by creating lithium extraction plants within shipping containers, so they can be deployed to test the process on multiple sites, following the same set of steps that they took for silica.

Due to the sensitivities around the IP used in this process, work is being carried out at a secret location away from Ohaaki. Meanwhile, Worth says that one of their main challenges is juggling the pressures from offshore to move faster:

“We’ve got investors and partners saying: ‘How fast can you get one of these containerised lithium plants on our site and get it running? We’ll fund the whole thing.’ We’ve got real investment interest, because sustainably extracting lithium from brine is seen as technically complex, commercially compelling and environmentally essential.

“At the same time, we’ve had 45 global geothermal operators visit us in Taupō and express an interest in our silica technology, particularly when combined with extra electricity generation and CO2 sequestration, so we’ve got something exciting going there too.”

With more awareness than ever of the destructive impacts of supposedly green and renewable technology, the world is desperate for an abundant supply of these sustainable resources. Worth says the hardest thing is telling the market to be patient.

“Sit tight, we’re now within weeks of commissioning this big plant, and then we’ll be ready to grow.”

Keep going!