Govt invests $2m to lift its stake in Geo40 and encourage venture to extract lithium from geothermal brine

Economic  Development  Minister  Stuart  Nash  reckons  it’s a game-changer:   the  government  is putting  taxpayers’ money  into  a  company extracting  the  valuable   mineral  lithium  from geothermal  brine  at  Ohaaki near  Taupo.

The  government’s aim is  to help scale  up  the project to produce lithium which is in  strong  international  demand for electric vehicle (EV) batteries.. EVs are expected to account for more than half of new car sales in the northern hemisphere by 2030.

Overseas, traditional ways of mining lithium leave a heavy carbon footprint, Nash said.

In contrast, the Geo40 programme involves new technology to recover lithium sustainably from geothermal brine, and return the water to the geothermal field. The brine is a watery residue containing mineral compounds, and is a by-product of geothermal electricity generation.

“If we can successfully build up Geo40’s green technology to commercial scale, New Zealand could become an international leader in technology for the sustainable supply of lithium, and help to build lasting action on climate change.  It could also help meet New Zealand’s 2050 carbon neutral target and create jobs to support the economic recovery.

“Expanding geothermal energy and advanced manufacturing opportunities in Taupō will be significant to diversify its local economy,” Nash  says.

 Geo40  was  founded in  2010 by Mike O’Sullivan  and Matt Sutcliffe, and opened its first plant in  2021. O’Sullivan is General Manager Development of the lithium project.

As at 31 January 2022 Geo40 had a total of 75m shares on issue. The top ten investors hold 52% of the ordinary shares in the company.

Nash  says the new Regional Strategic Partnership Fund (RSPF) will invest in Geo40, the first by the RSPF. It delivers on a manifesto commitment to keep supporting regional economic development once the Provincial Growth Fund closed to applications.

Regional leaders help set the strategic priorities for RSPF investment, which is seed funding as a catalyst for other investment

“If we can successfully build up Geo40’s green technology to commercial scale, NZ could become an international leader in technology for the sustainable supply of lithium, and help to build lasting action on climate change.It could also help meet NZ’s 2050 carbon neutral target and create jobs to support the economic recovery,” Nash said.

“Expanding geothermal energy and advanced manufacturing opportunities in Taupō will be significant to diversify its local economy.”

 Nash  says the investment of $2m through Kānoa will give the government a further equity stake in Geo40. It will enable the company to progress its lithium recovery method before moving to commercial production.

By taking an equity stake in the company, the government has the opportunity to share in the upside of the investment, and the company has the opportunity for growth without the additional burden of debt on its balance sheet.

Nash  points  to Geo40’s proven record of world-leading solutions to recover valuable minerals and elements from geothermal brine. It already  exports silica, recovered from the Ohaaki site. The silica technology was also supported by government with a $15m loan and equity funding from the Provincial Growth Fund in 2019”.

It is a collaboration between government, Geo40, the landowners and kaitiaki of the Ngati Tahu Tribal Lands Trust, and power generator Contact Energy.

Earlier  Geo40’s Direct Lithium Recovery technology was exhibited at lithium explorer Cornish Lithium’s drill-site in South West England, where the companies were looking  to sustainably recover lithium from groundwaters present in historic tin mines using Geo40 technology.

The company  successfully recovered lithium from groundwaters sourced from Europe, South America and New Zealand at laboratory scale. Geo40 has commercialised technology for the recovery of nano-silica from geothermal fluids and commissioned a $20m large-scale plant near Taupo in February 2021, built in partnership with Kānoa – REDIU, the New Zealand Government’s regional economic development and investment unit, and alongside Contact Energy and the Ngati Tahu Tribal Lands Trust.

Geo40 CEO John Worth said  at  that  time:

“We’ve been working hard on our lithium technology for the last two years and we are now at the point where we are ready to showcase what we can do. European automakers are actively searching for sustainable sources of lithium for EV batteries”  Geo40 used  the G7 summit in  Cornwall  it  to profile what it was working on.”

Worth also noted that Kānoa – REDIU’s support helped Geo40 attract new capital from New Zealand venture firm Pacific Channel.. In 2020, the company’s early work on lithium attracted the attention of Bill Gates’ climate-change fund, Breakthrough Energy Ventures, who indirectly invested in Geo40 via Swedish affiliate Baseload Capital.

The company is also working closely with Puna Group of Argentina, who hold 140,000 hectares of land with subsurface lithium-rich brines. Geo40 hopes to undertake lithium recovery work in Argentina at pilot scale in the medium term. Geo40’s technology is attracting international attention as it may offer a viable and sustainable alternative to current industrial processes.

“It’s very exciting, but we know that success will only come from putting our heads down and diligently continuing to fully develop the process and then through working alongside the best lithium explorers in the business,” said Worth.

Geo40’s  Ohaaki Northern Plant has  a capacity of over 5,000 tonnes of colloidal silica a  year.

These colloidal silica products can be used for nano-technology application, including precision investment casting and refractory fibre bonding and are being sold to customers as far afield as the USA, Mexico and Japan. Local customers include coatings company Resene, and the company is working closely with the concrete sector in the development of low-carbon concrete.

The company’s Geoseal colloidal silica products can replace the usage of polymers which may break down into micro-plastics and contribute to pollution in waterways. As a naturally occurring and abundant mineral, silica offers a non-toxic and robust solution for major infrastructure developments.

Geo40 began development of a direct lithium recovery process in 2019, and in 2020 ran a small pilot plant that successfully recovered lithium from geothermal fluid. The company’s process was developed to be relevant to the recovery of lithium from geothermal brines where lithium is often present in low concentrations. Since then, the company has successfully trialled its technology on a wider range of global geothermal fluids. Geo40’s approach leverages ultrafiltration technology successfully deployed at scale in its Ohaaki Northern Plant silica recovery operation.

The technology was developed at Geo40’s recovery plant at the Ōhaaki site, it extracts colloidal silica from geothermal brine for use in a range of applications.

By first removing silica, scientists are then able to recover more valuable resources.

In scaling up at the Ōhaaki site, Geo40’s scientists estimate they can recover lithium for twelve Tesla car batteries every day.

But the real opportunity lies with other sites overseas and brines with lithium concentrations thirty times stronger than in New Zealand.

2 thoughts on “Govt invests $2m to lift its stake in Geo40 and encourage venture to extract lithium from geothermal brine

  1. The game changer would be for the incompetent government to stop believing in climate change fairy tales, update their CVs and go look for a job, because they are on the way out.

    Like

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