Direct Lithium Extraction

Successful developments begin with understanding what you know—and what you don’t—about the subsurface.

ERCE’s Geoscience and Engineering teams are made up of specialists with a broad range of skills, enabling them to assess the size of lithium deposits and navigate the challenges of extracting lithium from the ground. Our global reach and work across diverse industries have provided us with extensive experience in a wide variety of geological systems. This expertise allows us to swiftly identify the subsurface challenges that influence your project. In every study, we ensure that we fully understand the uncertainties in the data and are experienced in communicating those uncertainties while developing tools to assess their potential impact.

Our team remains up to date with the latest innovations from multiple industries and regularly applies this knowledge to Direct Lithium Extraction (DLE) projects. ERCE recognises that the quantity of lithium flowing through facilities over time is uncertain, and our production and facilities engineers are skilled in designing project development plans and assisting in concept selection phases to accommodate high levels of uncertainty.

DLE is an industry with unique challenges:
- Many of the DLE reactors are at the pilot stage.
- Production, especially reinjection, of brine at the scale proposed by many projects exceeds regional experience.
- Some assets are located in countries where it is challenging to access financing.

Despite these challenges, Banks, Development Finance Institutions, and Export Credit Agencies are all working to find ways to finance large-scale DLE projects. ERCE has collaborated with the Banks to create a customized Due Diligence Report that accounts for the unique characteristics of DLE projects. ERCE supports financial institutions as the Lender's Advisor. Our experience includes due diligence for a first-of-its-kind DLE syndicate debt financing. We can work with you and your preferred financiers to execute a DD process to evaluate your project; appreciating that a tailored approach is required to understand your chosen project design.

Trusted by the finance community, ERCE provides an honest and transparent view of the risks and uncertainties, enabling informed decision-making.

Unitisation processes involve various technical procedures to determine tract participation in a Unit Agreement. The DLE industry needs to establish suitable procedures for this purpose.

ERCE specialises in equity determination and unitisation processes, having worked on numerous oil and gas projects as both Advisor and Nominated Expert. Negotiating the appropriate technical procedures is critical for the long-term success of unitisation. We provide expertise in implementing these procedures and managing legal processes when partners challenge them. With extensive experience in various dispute resolution techniques, we understand the advantages and disadvantages of each approach.

While uncertainty is inherent in subsurface data analysis, in unitisation, there is no room for uncertainty—there is only a single determination of tract participation. ERCE has the expertise to efficiently establish a single best technical case, and we are experienced in presenting our technical position in a way that maximises the likelihood of an Expert considering our client’s perspective.

ERCE has been producing Qualified Person Reports (QPRs) and Competent Person Reports (CPRs) since the 1980s. In DLE, we draw on our extensive experience across subsurface, wells, facilities, and financial challenges, gained through our work in the Oil & Gas, Carbon Capture and Storage, Geothermal, Helium, and Climate Disclosure industries.

Our in-house team of Geoscientists, Engineers, and Economists collaborate to evaluate all aspects of projects. As evolving standards demand, we integrate technical and commercial data, alongside permitting and ESG information, to provide a comprehensive view of assets. Our detailed reports are crafted to meet the global industry standards required by the project, and we frequently include climate disclosure in our evaluations.

Before acquiring another company or asset, potential buyers should undertake thorough technical, financial, and legal examinations of the target’s operations. ERCE has extensive experience in Red Flag Reviews, Due Diligence, and Fair Market Valuation processes (see our Commercial Services page).

Red Flag Reviews typically take one to two weeks, during which we analyse the Information Memorandum and supporting documentation to assess the assumptions underlying the seller’s valuation statements. Our aim is to identify and prioritise the risks associated with the proposed production and cost profiles.

Depending on the outcomes of the Red Flag Review, we may then proceed to a Full Due Diligence Study, assessing both subsurface and topside information. Our objective is to provide clients with a clear understanding of project uncertainties, helping them evaluate bid values. In DLE Due Diligence, we can provide analysis and reporting on the following:
- Static models and Lithium-In-Place estimates
- Recoverable lithium volumes for a given development concept
- Forecasted lithium brine production rates
- Forecasted lithium recovery rates from the DLE technology, accounting for facility constraints
- Forecasted depleted brine reinjection rates
- Projected costs (OPEX, CAPEX, and ABEX)Intrinsic Project Value