In California, a lithium gold rush at the edge of a dying sea

She paused. “But we’ve had a lot of hopes before that have not come about.”

Worldwide demand for lithium, used in batteries powering everything from electric vehicles to fighter jets, is projected to grow fivefold by 2030. That’s sparked huge interest in Beijing, Washington – and California, which sees “Lithium Valley” as its VIP ticket to the green economy, building on Silicon Valley’s success.

Last year, US Energy Secretary Jennifer Granholm descended on sleepy Calipatria, population 6,515 – including the 4,000 inmates at the state prison up the road. In March, California Governor Gavin Newson also paid a visit, calling the area “the Saudi Arabia of lithium”.

Government moves to end sales of gas-powered vehicles – California, the nation’s largest auto market, has set a 2035 deadline – are driving up prices. So too is the US$369 billion earmarked for clean energy dependent on lithium and other strategic minerals, under the 2022 US Inflation Reduction Act.

Lithium carbonate hit a record US$86,000 a ton in November, up from US$6,000 a decade ago, on strong Chinese EV demand, before falling back.

Tesla Chief Executive Elon Musk calls lithium extraction “a licence to print money”.

China’s dominance over the strategic mineral – a result of foresight, state planning and lax environment standards – has left the US racing to catch up in an industry it once dominated. According to the International Energy Agency. Beijing now controls three-fifths of the world’s lithium chemical supply and three-quarters of lithium-ion battery production.

Several other lithium deposits have been identified in the US: in Arkansas, Nevada, North Carolina and Utah. But the only currently working mine, in Nevada, accounts for less than 1 per cent of global production. That’s left the US facing a steep climb.

“Quite frankly, we’re in a vulnerable position,” John Podesta, a senior White House adviser on clean energy innovation, warned recently. China, he said, has the potential to “use its lock on supply chains to hold politically hostage decisions by governments”.

Nor is China standing still as it continues to impose restrictions on strategic metals and expand its footprint worldwide, including a US$1.4 billion investment in a Bolivian lithium extraction plant announced last month.

Finding US ore is the easy part. Far more challenging is building industries from scratch; tailoring the technology; and wisely investing a flood of federal and state subsidies, tax breaks and research grants. The global battery supply chain will need an estimated US$514 billion by 2030 to meet expected demand, the Benchmark Mineral Intelligence consultancy estimates.

US and other democracies also face more environmental restrictions and community resistance than Beijing, particularly involving the lithium processing that China dominates. That said, analysts report less US opposition to lithium projects than past mining ventures, given the mineral’s strategic importance, ties to green energy and promised jobs.

Imperial Valley also has a leg up: Engineers believe local extraction would be significantly less damaging environmentally and use less water and power than standard open-pit mining or salt lake evaporation methods.

That follows because lithium extraction would essentially be an add-on to existing geothermal plants southeast of the Salton Sea near the San Andreas Fault. But recovery at commercial scale is untested.

Three geothermal companies – Berkshire Hathaway Energy, Controlled Thermal Resources and EnergySource Minerals – are conducting pilot projects, racing to change that.

EnergySource, the furthest along, is set to break ground on a full-scale lithium extraction plant this year while BHE, partly owned by the billionaire Warren Buffett, is the largest with 10 geothermal plants. The three companies declined to comment or did not make executives available, citing tight schedules.

Since the 1980s, hot brine has been pumped up from the depths to turn turbines and generate electricity, its lithium content ignored. The focus now is on extracting the increasingly valuable “white gold” before returning the cooled brine under ground.

With an estimated 15 million metric tons of lithium, Imperial Valley is the world’s largest known lithium brine deposit.

Calipatria has seen its share of false promises that vanish like a desert mirage. The maximum-security state prison, opened in 1992, fuelled hopes of a job and housing boom, but most of its staff settled further south. Similar disappointments followed a solar project, beef plant, power transmission project and water pipeline.

“Very little trickled back,” said Nava-Froelich, who has a second job as director of the local school district’s family resource centre. “So now we’re very outspoken with the lithium.”

Hoping to establish rules before a boom materialises, the state formed the Lithium Valley Commission in 2020 that set a tax on lithium extracted commercially. Four-fifths would go to local community projects. And the rest would help address the deteriorating Salton Sea environment and its health-related problems, including chronic breathing problems among schoolchildren – the result of irresponsible farming practices and water shortages, not lithium extraction.

“They keep telling us asthma is not a problem,” said Jerry Prado, 83, a retired prison official. Others complain of periodic nosebleeds.

Luis Olmedo, executive director of the Comite Civico del Valle civic group focused on regional labour and community rights, is one of 14 members on the commission representing government, corporate and other interests.

“We’ve been taken advantage of for far too long,” said Olmedo, who moved to the area at age 7 from Mexico. “When someone wins the lottery, everyone wants a piece of it, like a gold rush. But let us get to that point first.”

Imperial Valley officials would also like to see a complete supply chain built locally, from lithium extraction and processing, to battery and auto manufacturing, to recycling. That would, they say, cut energy use, reduce Chinese dependence and reverse the valley’s economic slide.