The lithium space has certainly been getting plenty of attention as of late, with investor excitement largely driven by rising lithium prices and increasing demand from the lithium-ion battery sector.
Analysts believe that over the next several years lithium demand will increase by 60 to 250 percent — and that the metal will sell for 50 percent or more above historical levels.
For that reason, many companies are currently on the hunt for new sources of lithium. Most of the world’s lithium is currently produced in Australia, Chile and Argentina, but more recently there’s been a veritable lithium rush in Nevada as well.
That’s partially because Tesla Motors (NASDAQ:TSLA) has announced plans to build a massive lithium-ion battery gigafactory in the state. The fact that the Clayton Valley is home to the Silver Peak mine, the only producing lithium brine operation in the US, also doesn’t hurt. Silver Peak is currently owned by Albemarle (NYSE:ALB).
Read on to learn more about the Clayton Valley and the lithium companies operating there.
A brief overview of the Clayton Valley
According to a report on lithium brine deposits from the United States Geological Survey (USGS), the Clayton Valley covers roughly 100 square kilometers, but has a catchment area of approximately 1,400 square kilometers. That’s because the Clayton Valley sits lower than at least four adjacent basins, all of which are hydrologically linked.
“In this case, it is the combined area of all five linked catchments that matters, making the effective area of the Clayton Valley Li-brine system much larger,” the report explains.
The USGS calls the Clayton Valley “the best-known deposit in the world” for lithium, citing a number of factors indicating lithium resource potential in the area. Those include:
A closed, tectonically active basin
An arid climate
Elevated heat flow due to hot springs or young volcanoes
In the 1970s, the USGS noted that hectorite was believed to exist in the basin
Companies in the Clayton Valley
There is certainly ample reason for lithium companies to be interested in the Clayton Valley. Here’s a list of some of the lithium companies that currently have lithium projects in the Clayton Valley:
Some of the companies on the list are fairly advanced, whereas others have only recently staked claims in the valley. For example, Pure Energy Minerals completed a resource estimate for its Clayton Valley project in July 2015 and has signed a conditional lithium supply agreement with Tesla.