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Duke University, UCT make tangible investment recommendations ahead of lithium, rare earths boom
Episode 67
Published 3 weeks, 2 days ago
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A first-of-its-kind report from researchers at Duke University and the University of Cape Town (UCT) has mapped the most credible research and development opportunities for lithium and rare earth processing, with the researchers offering recommendations to countries and companies in the Global South that are trying to go beyond mining to expand their processing capability.
The report helps to inform the global collaborative platform that is the Council for Critical Minerals Development in the Global South that was created in response to the anticipated rises in commodity demands for lithium and rare earths, among others.
The International Energy Agency (IEA) predicts that meeting climate targets requires an eight-fold rise in lithium demand and a doubling of magnet rare earth demand by 2040 but says the binding constraint is not getting the resources out of the ground, but the midstream processing stages - where China currently controls between 60% and 70% of lithium conversion and more than 85% of rare earths seperation.
Many Global South countries and companies within them are trying to expand their processing capability of these elements, yet many of the actors lack the understanding of the latest research, development and innovation in critical mineral processing, Duke and UCT finds.
The organisations recommend that companies making strategic decisions on where to invest in critical mineral processing should concentrate on five priorities: capturing value at the processing chokepoint, targeting the pilot-to-demonstration stage, investing in new technologies beyond tradition evaporation ponds in lithium's case, prioritising the energy and carbon cost of conversion, also in lithium's case, and treating seperation and recycling as important priorities in the case of rare earths.
Duke and UCT expand on these points by explaining that mining a lithium deposit or rare earth resource without securing downstream conversion, separation, or refining capacity leaves most of the margin and strategic leverage with whoever controls the midstream.
"Because these value chains are concentrated rather than truly global, chokepoint participation is best treated as an entry point toward broader integration across adjacent stages of the chain, not as an end state. This requires identifying and committing to specific processing partnerships or in-country conversion investments at the project development stage, well before financial close," the report states.
Additionally, the most commercially credible innovations across the lithium and rare earth chains - direct lithium extraction (DLE), lower-temperature spodumene roasting, and continuous rare earth ion exchange - currently sit at technology readiness levels of 5 to 7, which are the stages where capital availability, not technical uncertainty, is the main constraint.
UCT and Duke say financing instruments differ by stage, with pilot plants needing equity and grant capital, while demonstration and first commercial units need offtake commitments and debt guarantees.
"Companies able to invest in equity, offtake commitments, or co-development partnerships at this stage will secure better technology access and pricing than those that wait for technology readiness levels 8 to 9," the organisations note.
Moreover, in terms of lithium through brine ponds investment, UCT and Duke suggest that conventional brine evaporation recovers only 30% to 50% of lithium over a 12- to 24-month cycle and is exposed to regulatory and water-use constraints. DLE technologies, on the other hand, particularly those in China, Argentina and at pilot stage elsewhere, can recover more than 90% of lithium in hours.
However, DLE performance is stro
A first-of-its-kind report from researchers at Duke University and the University of Cape Town (UCT) has mapped the most credible research and development opportunities for lithium and rare earth processing, with the researchers offering recommendations to countries and companies in the Global South that are trying to go beyond mining to expand their processing capability.
The report helps to inform the global collaborative platform that is the Council for Critical Minerals Development in the Global South that was created in response to the anticipated rises in commodity demands for lithium and rare earths, among others.
The International Energy Agency (IEA) predicts that meeting climate targets requires an eight-fold rise in lithium demand and a doubling of magnet rare earth demand by 2040 but says the binding constraint is not getting the resources out of the ground, but the midstream processing stages - where China currently controls between 60% and 70% of lithium conversion and more than 85% of rare earths seperation.
Many Global South countries and companies within them are trying to expand their processing capability of these elements, yet many of the actors lack the understanding of the latest research, development and innovation in critical mineral processing, Duke and UCT finds.
The organisations recommend that companies making strategic decisions on where to invest in critical mineral processing should concentrate on five priorities: capturing value at the processing chokepoint, targeting the pilot-to-demonstration stage, investing in new technologies beyond tradition evaporation ponds in lithium's case, prioritising the energy and carbon cost of conversion, also in lithium's case, and treating seperation and recycling as important priorities in the case of rare earths.
Duke and UCT expand on these points by explaining that mining a lithium deposit or rare earth resource without securing downstream conversion, separation, or refining capacity leaves most of the margin and strategic leverage with whoever controls the midstream.
"Because these value chains are concentrated rather than truly global, chokepoint participation is best treated as an entry point toward broader integration across adjacent stages of the chain, not as an end state. This requires identifying and committing to specific processing partnerships or in-country conversion investments at the project development stage, well before financial close," the report states.
Additionally, the most commercially credible innovations across the lithium and rare earth chains - direct lithium extraction (DLE), lower-temperature spodumene roasting, and continuous rare earth ion exchange - currently sit at technology readiness levels of 5 to 7, which are the stages where capital availability, not technical uncertainty, is the main constraint.
UCT and Duke say financing instruments differ by stage, with pilot plants needing equity and grant capital, while demonstration and first commercial units need offtake commitments and debt guarantees.
"Companies able to invest in equity, offtake commitments, or co-development partnerships at this stage will secure better technology access and pricing than those that wait for technology readiness levels 8 to 9," the organisations note.
Moreover, in terms of lithium through brine ponds investment, UCT and Duke suggest that conventional brine evaporation recovers only 30% to 50% of lithium over a 12- to 24-month cycle and is exposed to regulatory and water-use constraints. DLE technologies, on the other hand, particularly those in China, Argentina and at pilot stage elsewhere, can recover more than 90% of lithium in hours.
However, DLE performance is stro