In the mid-20th century, the Salton Sea sparkled as an oasis in the California desert.

However, the area — part of a region known as the Imperial Valley, and now Lithium Valley — has since turned into an environmental crisis, with the lake shrinking every year due to factors like climate change and water usage restrictions that affect run-off. That shrinkage has caused toxic dust to be released from the exposed lake bed, due in part to chemicals that had been deposited from agricultural run-off.

At the same time, Lithium Valley is a geological gold mine, or lithium mine in fact. For decades, the region has produced geothermal power by bringing brine up from beneath the Earth’s surface.

Within this brine lie valuable minerals, particularly lithium, which have come into focus in recent years due to the growth of electric vehicles (EVs), because EV batteries typically depend on lithium as an input. A study by the US Department of Energy in 2023 found that the Salton Sea region could have enough lithium to support more than 375 million batteries for electric vehicles; more than the current number of vehicles, not just EVs, on US roads. 

The mineral mining potential of the region is not exactly new. Around eight years ago, mining companies were exploring the area and even began collaborating with Efrain Silva, dean of Imperial Valley College, to develop a workforce for their lithium extraction projects. While some of these projects ended up not really going anywhere, a renewed hope rose over the past few years due to exponential growth in demand for lithium, along with technology improvements that make lithium extraction more viable.

“All of the stars aligned for this to become a better reality,” says Mr Silva.

Yet lithium mining is not without its environmental concerns, and while this brine extraction method is generally considered more sustainable than other forms of lithium extraction, stakeholders are trying to prevent history repeating itself in terms of creating another boom-and-bust cycle that leaves behind more environmental degradation.

Bringing investment and jobs

Imperial Valley-based Controlled Thermal Resources, or CTR, has led the new wave of companies trying to develop lithium resources in the area. The company has developed a $15bn development vision for its site in Lithium Valley, also known as Hell’s Kitchen, which entails seven development stages for the production of lithium and power. The company already has deals in place to supply automotive firms GM and Stellantis with lithium. 

CTR’s vision also leaves the door open to the development of two co-located battery hubs, perhaps through a joint venture, Rod Colwell, CEO of CTR, tells fDi. The battery hubs are priced at an estimated total of $13bn. 

CTR plans to create around 1400 direct jobs in its lithium and power component, with a commitment to source at least 90% of these jobs locally. CTR also projects the battery component to create around 7000 more jobs. CTR hopes this would all occur before the end of the decade, though the company does not have definitive build-out dates. 

Two other companies — Berkshire Hathaway Energy Renewables and EnergySource Minerals (which has a contract to supply Ford with lithium) — also have significant plans to extract lithium in the region. These projects could help inject billions of dollars and thousands of jobs into the local economy, but much depends on whether what is proposed actually comes to fruition.

Limited local boost? 

However, lithium mining itself might only provide a small boost to the local economy, given that lithium extraction accounts for less than 1% of current and expected jobs in the US lithium battery supply chain, according to research from the UC Santa Cruz Institute for Social Transformation, New Energy Nexus and the UC Berkeley Labor Center. Instead, most of the jobs lie further down the supply chain, such as with battery manufacturing, as CTR is exploring, as well as EV manufacturing.

The good news is that producing batteries near lithium extraction operations in Imperial Valley could be more economical than exporting the mineral to support overseas manufacturing, says Mr Colwell.

Plus, the lithium industry could support ancillary jobs in other sectors, with an Imperial Valley Economic Development Corporation assessment finding that CTR’s work alone could have around  a 1.8x multiplier effect. 

Already, the region is starting to see some ancillary development that could support further innovation and an educated workforce ready to take on these new jobs.

For example, in February 2024, San Diego State University Imperial Valley broke ground on its Sciences and Engineering Laboratories, expected to open in late 2025. The facility includes a Stem Innovation Hub and is meant to support the region’s growing role in green energy development.

Imperial Valley College is also jumpstarting local workforce development efforts, such as with a new lithium programme that started in autumn 2023 to train students for lithium-related jobs.

Addressing sustainability concerns

While Lithium Valley holds significant economic potential, the region’s environmental troubles in the past and present loom large. 

Some stakeholders are concerned that lithium extraction could have negative consequences, such as by drawing from an already constrained water supply. As planned, lithium and geothermal projects would account for 6% of the local water district’s allocation from the Colorado River, up from about 1% now. While that proportion is small, future water restrictions could require some shifts away from agricultural usage, according to the Lawrence Berkeley National Laboratory.

“One of the biggest concerns is cumulative impact to freshwater supply and how that may impact Salton Sea degradation,” says Luis Olmedo, executive director for Comite Civico del Valle (CCV), a local community nonprofit.

On March 13 2024, CCV filed a petition with Earthworks to legally challenge the approval of CTR’s Lithium Valley project, citing environmental concerns.

Mr Olmedo says CCV is not opposed to lithium extraction but wants to make sure it is carried out in a sustainable way for the community and environment.

California does have a flat excise tax ranging between $400 to $800 per metric ton on lithium carbonate equivalent extracted, which will provide funding for environmental and community development concerns, including Salton Sea restoration projects.
While CTR wanted a royalty tax and thinks the flat tax is excessive, Mr Colwell says the company does see the value of taxation to address community concerns, including CTR not wanting employees to work in polluted environments.

Altogether, Lithium Valley looks poised to support the growth of EVs and a broader clean energy economy, while being mindful of the region’s environmental issues. That’s not to say that progress will be a straight line forward, but holistically, the region looks pointed in a more positive direction environmentally and economically.

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This article first appeared in the April/May 2024 print edition of fDi Intelligence.