General Motors invests in EnergyX lithium production

General Motors said Tuesday its venture capital arm will lead a $50 million funding round for EnergyX, a Texas-based startup developing a more efficient way to extract and process lithium from salt flats.

Lithium is a critical component in electric vehicle batteries. As part of the agreement, GM will also help develop EnergyX’s technology and have first refusal rights to purchase lithium from any projects developed by the startup.

EnergyX demonstrated its technology with a pilot plant in South America’s “Lithium Triangle,” a salt lake region that covers parts of Argentina, Bolivia and Chile and contains over half of the world’s known lithium reserves.

Miners in the area are currently extracting lithium by pumping water underground to flush out the mineral and then allowing the resulting brine to evaporate in a series of ponds. The process is relatively cheap, but recovers only 30% to 40% of all lithium – using huge amounts of water and land in the process.

EnergyX’s pilot plant, which opened last year, has demonstrated that its technology can recover 90% or more of the lithium in brine while using much less energy, water and land than existing processes.

EnergyX plans to use the new funding to build five major demonstration plants in North and South America.

A key priority for GM is to develop a North American lithium supply that cannot compete with global supplies using current extraction methods. The auto giant believes EnergyX’s technology could reduce costs enough to make North American lithium mining profitable while minimizing the environmental impact of mining the mineral.

GM will report its first quarter results before the US markets open on April 25th.