S2 E72: How to Extract Lithium from Water: 5 Insights from Gradiant’s CEO

Dustin Olsen (00:41)
Hey everyone, welcome back to the Rare Earth Exchanges Podcast. You're joined by me, Dustin, my co-host Daniel, and our guest this week is Anurag, who is the CEO and co-founder of a company called Gradiant. And it is an MIT founded, $1 billion water technology company and has recently expanded into extracting critical minerals from a first of a kind facility doing

Daniel O'Connor (00:47)
. .

Dustin Olsen (01:07)
Battery grade lithium from oil filled produced water in Pennsylvania.

So Anurag welcome to the show. How are you doing?

Anurag Bajpayee (01:15)
Thank you, Dustin. Doing great. ⁓ and great great to be here on this discussion.

Daniel O'Connor (01:16)
. .

Dustin Olsen (01:21)
Absolutely. So I'm intrigued. You've caught my attention. So you're pulling critical minerals out of waste from oil fields that is viable enough for battery technology. Is that correct?

Anurag Bajpayee (01:31)
Yeah.

That is correct. We have in fact demonstrated

production of battery-grade lithium from ⁓ this produced water ⁓ from our site in Pennsylvania.

Dustin Olsen (01:49)
That's honestly amazing. So can you kind of just walk us down the path that it led to this discovery with all your experience in just water water technology?

Anurag Bajpayee (02:01)
Yeah, so so I'll preface the the story with by saying that lithium extraction from brines is a glorified water treatment problem. you know, and Gradiant has spent the last almost decade and a half, almost thirteen years really developing

⁓ new fundamentals, ⁓ fundamentally new solutions and technologies in the industrial water treatment and recycling space. So we started out of MIT with one technology, which was my co-founder's PhD work at the time. And ⁓ over the years we became an end-to-end water management, water solution provider to our industrial clients.

What that meant was we not only of course developed and commercialized that first technology, which was over on the brine concentration side, but we invented and developed multiple proprietary technologies across the water value chain. So when you treat water, there are multiple steps involved, pretreatment, disinfection, potentially.

Daniel O'Connor (02:57)
.

. .

Anurag Bajpayee (03:17)
Membrane desalination, if you go even further, you're talking about concentrating further that that brine, right? So brine concentration, zero liquid discharge, where you ensure that no liquid goes out and all the way and including ⁓ solids treatment. So

We had been operating in various industrial settings, starting, you know, initially from energy to power to mining. more recently in the AI infrastructure world, so semiconductor and data centers, which is frankly where most of our growth and momentum is coming from right now. But as we were looking at this science, this ⁓ chemistry of water or various types of water that had

Daniel O'Connor (03:54)
you you

Anurag Bajpayee (04:04)
Various kinds of dissolved solids in it, in you know, different types of salts and frankly, even some resources. we got pulled into the lithium extraction world about four or five years ago now, but

that was solely because of our brine concentration technology. So if you look at

Lithium extraction from brines, which by the way is a huge potential value because most of the world's lithium is in fact in brine's and not in the clay, the way it's been traditionally mined. When you take these brine solutions, they're very dilute solutions of the lithium. So first thing you have to do, you have to make it

Daniel O'Connor (04:46)
.

Anurag Bajpayee (04:50)
Lithium-rich, meaning you have to remove the lithium from all the other stuff that's in it. And then you have to concentrate it.

Right? So you have to remove water from this brine, from the solution, so that what's left behind becomes more and more concentrated, and therefore easier to take that lithium salts out of it and produce it and get a commodity of value. So from where we were looking, concentrating this lithium stream.

was really just a water treatment problem, right? We concentrate brines when we recover pure water from it. Whether it's in you know in a in water that's you know produced water or water that's coming out of industrial waste, water that's coming from ⁓ semiconductor fabs, water that's left after evaporation from the data centers. You're when you remove water, you're concentrating what's left

Daniel O'Connor (05:38)
.

Okay. you

Anurag Bajpayee (05:51)
It so happens

in the case of brines that have critical minerals that what's left

Is more valuable from a dollar value standpoint than the water that we're pulling out. So again, from a technological, from a scientific standpoint, it really was a water treatment problem for us. It just so happens that in this case, you end up extracting lithium. So once we got into it, we as a company we've always taken this end to end approach because we're problem solvers at the end of the day, and solving a part.

Of the problem is not good enough for Gradiant, so we you know we fixed the entire problem. And when we looked at lithium, fixing the entire problem, delivering the end-to-end solution meant developing our own DLE, that first step in the process, combining that with our concentration technology, which is how we got pulled in into the first place, and then being able to finally recover the battery-grade lithium from that concentrated brine. So

that ended up being the evolution of Gradiant also becoming an end-to-end lithium refiner, which is a business now, you know, one part of the business that we're very excited about. Long answer to your question, but I wanted to make it comprehensive.

Daniel O'Connor (06:58)
.

Dustin Olsen (07:09)
Mm-hmm.

I think that's ⁓ it's helpful and honestly very interesting. so I would like to hear just get your take really quick too. So water has been a big part of the mining operation and how they they extract a lot of things. And so do you guys deal with a lot of that too as part of just kind of the remediation of ⁓ wastewater?

Daniel O'Connor (07:16)
.

Anurag Bajpayee (07:16)
Yeah.

Yeah, yeah. So we

had been working for mining customers even before we got into the DLE space. ⁓ we had been cleaning wastewater from mining operations. We'd been cleaning tailing spawns, water, you know, that sits in tailing spawns after the the usage from the mine. And at least in a couple of cases, we were in fact recovering

Daniel O'Connor (07:43)
. Okay.

Anurag Bajpayee (08:02)
minerals from that wastewater. So we were we were in fact recovering nickel from the wastewater of one of the mining companies well before we were in the in the DLE space or had invent you know developed this end-to-end solution. And we and we continue to do that. So whether it's copper mining, nickel mining, ⁓ even in some places uranium mining, we

We've we continue to do that wastewater treatment and recycling application.

Daniel O'Connor (08:33)
Yeah, first of all, I want to say congratulations on your E round of financing. It's quite a substantial round and you guys are getting pretty big. So congratulations. First of all, building a billion dollar corporation is not easy. So impressive. So when you look at this market space for, we have a

Dustin Olsen (08:33)
That's awesome.

Daniel O'Connor (08:59)
⁓ a spectrum of ⁓ viewer here and community member at our website. For lithium, were you good in the DLE in lithium? What's the issue today? Most of the lithium today is separated or processed refined out of China today. We understand why that happens with rare earth elements. a very ⁓ unique set of circumstances that

Anurag Bajpayee (09:12)
Okay.

Daniel O'Connor (09:23)
sort of evolved that way. In this case, is it similar? what's, could you give us just a brief overview, cliff note overview of why lithium production has evolved the way it has, just for a bigger picture context?

Anurag Bajpayee (09:39)
so this is this is how I will explain it to you. And I honestly on why lithium is produced in certain places and in a certain way today, I'm not the world expert on. but look, there was a time when US was the world leader in lithium extraction.

There was also the time when lithium wasn't needed in the world in such large quantities, right? And over time, it it it it wasn't from from my understanding, it wasn't really the where the deposits were or where the mining was happening, but rather where the processing started happening. And ⁓ I mean for

th and really like there's no better way to describe it that China took the lead on that refining step, you know, setting up refining capabilities in some ways before lithium became a far more valuable commodity than it was, say, four decades ago.

And of course, you know, the the traditional methods of mining lithium are rather energy intensive and are rather environmentally disruptive. so that's also, I mean, much like several other industries,

Quite a bit of the environmentally disruptive industry moved to Asia and specifically to China. So that that is, in my understanding, a big part of the reason. and then, you know, before we knew it, China was producing by far the most lithium and even other critical minerals ⁓ versus anyone else in the world.

Daniel O'Connor (11:26)
So, and thank you, appreciate that. And exactly what I, the level I wanted to at least look at this problem. And if you look at separation or DLE as you call it, is there not different, at least a couple different categories of how you pull the or separate the lithium and what's different about your methodology and your technology?

Anurag Bajpayee (11:32)
Mm.

so look, I mean there is the brine mining and then there is the traditional mining. So the traditional mining is coming from the the clay, the rock, where it ends up being quite one, actually the the brine deposits are the majority of the lithium deposit in the world. And and two, the traditional method of mining is like we were discussing earlier, rather.

Disruptive. Now, when you come to brines, if you just take brine, you know, you drill for the lithium brines.

The traditional way to remove lithium salts from there would be to put it in evaporation ponds, which again becomes quite environmentally disruptive because you need a lot of land for for this and you need a lot of water for the for the mining process itself, right? To pull it out in the first place. what we are doing here is we are condensing.

All of that area that is needed for brine ponds or evaporation ponds essentially into a much more compact brine concentration system, which does a few things, right? One it reduces the area requirement by

Daniel O'Connor (13:09)
.

Anurag Bajpayee (13:14)
Over 95%. I'd like to say 99%, but

that's not entirely true in every setting. It reduces the time to process, which used to be in weeks and months, to really seconds to minutes, because it becomes a continuous process. And in the process of refining the lithium, in the process of extracting lithium, we are actually recovering the water.

as well, which then is recycled back into the operation. So remember where I started with right that

Extraction of lithium from the brine is a glorified water treatment problem. So, as part of this, we are also still treating the water. So you're cutting down your water consumption, you're cutting down the area needed to accomplish this, you're cutting the time from you know weeks or months to minutes, really, and you are cutting down the energy consumption massively. Because you know, one may argue, look, we're just putting the water out there.

Daniel O'Connor (13:51)
Yeah.

Anurag Bajpayee (14:17)
It's just evaporating. Okay, that's fine, but you need to create those ponds, you need to line the line the land. You you know, that's not without ⁓ energy consumption and material consumption, and it's very high energy consumption. So doing what we are doing, you are cutting down on all of that, and the goal is, and not the goal, in fact, demonstrated is not just

That this becomes a much more environmentally sustainable practice, but also economically, far more economically viable than it would be otherwise.

Daniel O'Connor (14:51)
So basically, you can come in using this methodology and system, and you can get better, more productive results, more clean, and ⁓ so productive, safe, better for the environment. It sounds like it's a home run. And where are you at in the adoption? So if we looked at…

the lithium brine operations worldwide. How are you positioned? I'm assuming your technology is pretty unique, patent-approved. ⁓

Anurag Bajpayee (15:28)
Yeah, in in many in

many cases patented, yeah, approved, ⁓ and some pending as well. We l we like to say Gradiant's IP portfolio is both young and mature. Young because we still have a lot of years left on those patents, but mature because more than half of our claims are actually already allowed.

Daniel O'Connor (15:34)
So.

That's great. like, I guess, how do you fit into the ecosystem? I mean, how competitive is it for the lithium-based market? Sorry, for the brine-based lithium market? Are you like a market leader now? What is that landscape? We have a lot of investors that come to this show, so it's important for them to understand where you fit in.

Anurag Bajpayee (16:10)
Yeah.

Yeah.

So so in some ways, in some ways, Daniel, it's early days in the sense that there really there they're really, even though there's so much promise and so much effort has gone into this, brine mining from lithium, but brine mining for lithium isn't being done at scale right now.

Daniel O'Connor (16:36)
Interesting.

Anurag Bajpayee (16:38)
It some i you know, if we look back a few years, there were a lot of hopes that by now we would be producing lithium from brines at large scale, but several of those projects have been delayed for various reasons, whether it's permitting, whether it's

environmental pressures, whether it's even price of lithium fluctuating. ⁓ it will happen, but it's all been pushed back several years. Where we are coming from is we are actually ⁓ at least for our initial production, we are producing lithium from our own site, from our own water that we own. We own

Title to this water. We are not seeking drilling permits. We are not looking to deploy CapEx and OPEX into bringing this brine from under the ground to above the ground. So that cuts our time to market by several years, frankly. You know, I mean even traditionally mining projects are

long term projects, right? You know, we when when we first started working for our mining customers, people said, you know, it's gonna be ten years before you deploy something. I mean it wasn't ten years, but yes, it did take several years to deploy something. Here ⁓ where we are is

You know, if you think of our lithium business, it is really a mining business, except here we have the water that we need to process, or we have the the brine stream that we need to process. So the lithium is already there. In a way, it's already there. We have to refine it. So it becomes much more from a mining operation to a refining operation, ⁓ which is inherently faster. And the technology is there, the technologies demonstrate.

Daniel O'Connor (18:16)
.

Mm-hmm. Mm-hmm.

Anurag Bajpayee (18:28)
At some scale, so lab scale and field scale, what we are next doing, hopefully within the next 12 months, operating at commercial scale and selling, selling this lithium. You know, in terms of, you know, there is this universe. So we talked originally about the universe of conventional lithium mining and then now the brine-based lithium mining.

Daniel O'Connor (18:48)
Right.

Anurag Bajpayee (18:52)
We're not the only ones who are exploring the brine mining of lithium. there are others, but today ⁓ Gradiant's ⁓ one of the few, if not the only one that is bringing that end-to-end solution from

you know, established leadership in the first step of the process to our globally known water treatment and brine concentration capabilities. And then then the last step of of actually producing it. having our site not just identified but purchased and owned, having that stream of brine that is about to be processed already showing up at our site. You know, traditionally it was

we were treating it, you know, to to recycle the water. Now we're treating it to recover the lithium.

Daniel O'Connor (19:38)
Right.

Which you know, I was just gonna say which is a great addition to your business, right? I mean, it's fabulous so what I hear you saying is that it's still early days and That there's a lot of growth coming with

Anurag Bajpayee (19:54)
Absolutely.

And and you know, you mentioned in addition to the business, Daniel, we are actually taking this business and spinning off into its own company called Alkali. that's because while from a technological standpoint it's very similar to what we do in water treatment, from a business standpoint, it's really a mining business, not a water business.

Daniel O'Connor (20:18)
Right, makes sense. Yeah, I see what you're saying. It makes sense. it is a, you are upstream. If we take the traditional upstream, midstream, downstream, and remember what we do with the rare earth elements are we have a system of looking at the assets as a system, not just mines. We look at upstream, mining, midstream,

separation, refining, metalization, the case of Rare Earth, downstream magnet production or other forms of production. So yes, so I could see that you spin off that company and you focus on lithium mining. ⁓ I don't know enough about the market. have… Right.

Anurag Bajpayee (20:59)
Yeah.

Lithium and critical minerals, you know, I mean lithium is the first step, but eventually

our target would be the larger critical mineral market. but again to your point, Daniel, right? The idea is to create that focus on what is a fundamentally a different business from what we're doing in the industrial water treatment world and therefore give it the best shot of success.

Daniel O'Connor (21:27)
And just on that note, could you just talk about some other critical minerals that your process would be highly relevant to and where you could add a lot of value? Could you give us some examples?

Anurag Bajpayee (21:41)
I mean I would just add r right away nickel and copper to it. especially as I gave you the example even before we got into lithium.

We were ni recovering lic ⁓ nickel for for one of our customers, two of our customers actually. So nickel and copper would be right on the heels of it. but obviously, you know, a big part of of executing something successfully is focus. And today and for the next I would say several months to one year or so we're laser focused on producing lithium from our first site.

Daniel O'Connor (22:17)
Got it, got it. Dustin, I have a few more questions, but please jump in.

Dustin Olsen (22:23)
Yeah. So I want to talk about the the Alcali facility that you you just mentioned here. So you've described it as a fully integrated facility, ⁓ which involves a lot of steps. So I'd be curious to get your take on how this is genuinely different from other facilities out there trying to do the same thing.

Anurag Bajpayee (22:45)
Yeah, so I mean for one there was I I'll give you an example of another project that we worked on ourselves, but we were only part of the solution. So the concentration step, the middle step

Actually, there were there were four steps. So before the water, the brine goes into the DLE, there is a pre-treatment of it too, because you can't send it through the DLE before pre-treating it for certain contaminants and impurities. So Gradiant actually sat at the far upstream of this train.

Then came the DLE step, which wasn't ours. Frankly at that time, you know, we we weren't fully ready, but also the end user already had a had a

With another company. So the DLE was some another company's process. And then came the concentration, which is again where Gradiant sat. And then the final step of recovering the salt from the concentrated solution was a third company. So there were actually three companies involved with Gradiant being in two of the steps and the other two being in one step each. And that I mean, look, that project happened and was

was

was proven out, was the results were good, but it didn't really scale as of yet. So I think part of it was there were some unresolved technological challenges in the in the entire four or five-step process. And part of it was it wasn't one entity sort of overseeing the entire process.

So the way we why we are different at this site versus some of the others that are trying to do it, you know, we believe our DLE is significantly better than in and when I what what what does better mean, right? Better really means two things, efficiency and cost effectiveness. you know, in the water world or even more so in the commodity world.

it a better process means it is more efficient and more cost effective, right? You can't have like, I have a better process, but it's more expensive kind of a thing. so the concentration step, which is where a large amount of the energy consumption goes in and which is what truly determines the efficiency Gradiant is a global leader in that and as we have been you know

Shown from our track record in the industrial waterside. You know, today Gradiant has more membrane-based brine concentrators installed around the world than any other company. And that's a fact. So it just comes down to, in the end, our process being

more energy efficient and therefore more cost effective. And it comes down to us controlling the end-to-end process, not relying on other companies and vendors to supplement. And number three, by owning the site and having the brine already there ready to process, we are cutting down the ⁓ permitting and the planning part of the process by

Leaps and bounds.

Dustin Olsen (26:09)
Makes a lot of sense, truly. So kind of a follow-up question to that is you need people to recognize the value that you bring to the table. So w speaking of water, that's kind of your feedstock for a lot of what you do. And a lot of these operations probably have viewed water as a waste disposal problem, not necessarily as a feedstock.

Daniel O'Connor (26:13)
.

Dustin Olsen (26:36)
haven. So how are you you you've got the process, but how are you ch flipping the narrative so that people look at the water waste as a value asset and not something that is a is an expense to get rid of.

Daniel O'Connor (26:39)
. .

Anurag Bajpayee (26:53)
So it's a really, really good question, Dustin. You know, ⁓ we you're right, water has often been thought of as either a waste stream

or even on the front end as something that's taken for granted, right? Like, you know, you turn the tap on, water comes out. So traditionally

Daniel O'Connor (27:06)
Okay.

Anurag Bajpayee (27:17)
The value of water has been quite elusive. And ⁓ you know, my co-founder says it's no one else's fault but ours that we started a water treatment company. And ⁓ but but I mean I joke, you know, we we've been from the very beginning focused on

In fact, creating that value of water, creating the respect for water, and then doing it in an economically viable way so that it doesn't get sidelines, like, yeah, great, but too expensive, kind of a thing. But what has happened is it's not us flipping the script, but two things. One, the value and criticality of water has become more and more evident as

The pressure on water resources has become higher, right? With with all the advanced manufacturing that we're seeing. I mean, these days, right, with all the chips consuming the water, with all the AI consuming so much water. It has really become a public discussion. It wasn't this way even 10 years ago.

you know, we probably wouldn't be having this conversation on water a decade ago because it wasn't, you know, front and center in people's mind. but today it is. and by doing what Gradiant has done over the last decades, and we've done it for some very some of the very largest companies in the world, is we have proven that you can look at water not as a liability.

Daniel O'Connor (28:39)
Okay.

Anurag Bajpayee (28:50)
But as a resource, because treating it, recycling it, recovering

resource from it can be done in an economically viable way. And so when and when you start looking at your wastewater not as a liability but as a resource, you also realize you control your own destiny. If you can recycle 99% of the water that you would have otherwise thrown away.

You are taking only 1% water from the public water supply. So now you control your source water, you control what's happening to your wastewater. In essence, you control your water destiny. And we have you know explained the message that look, controlling your water destiny means controlling your business destiny because you're in you're shielded from what may happen if policy.

Policy

changes, if public perception changes, if droughts happen, right? If there's a drought, you know who's going to get off first? It's the industry, not the homes and the farmers, right? So by

Seeing that you can treat and recycle and manage water economically and efficiently, and by doing so, you control your not just environmental sustainability, but business sustainability, I think it is automatically making that case, as is evidenced at least, you know, in our other business. I mean, take, for example, our AI infrastructure business, largely semiconductors and data centers.

Daniel O'Connor (30:04)
Okay.

Anurag Bajpayee (30:26)
it is at historic momentum right now. So I think that case for water, at least in some sectors, is already made, partly because the market dynamics have made everyone realize that and partly because we came along and we demonstrated to customers that they can do this without spending an arm and a leg and while controlling

Daniel O'Connor (30:53)
That really impressive though how this is evolving and it's to become much more comprehensive and impactful. Very much so. So to the extent you can, just so we can get a sense of what a project looks like, do you have a pipeline of lithium projects in the queue where you're going to activate and take them live in terms of

the mining and refining side. Is that something you can talk about?

Anurag Bajpayee (31:18)
So I mean obviously I can't I can't name names here. ⁓ but we are in discussions with several potential partners. ⁓ we do believe, however, again coming back to that focus right.

Daniel O'Connor (31:21)
Of course, yeah.

Mm-hmm.

Anurag Bajpayee (31:35)
The capabilities and the commercial viability of it almost become self-evident when we start selling our own lithium. So that's the goal. But that said, we want to set the stage for the next step of what happens after we're producing and selling the lithium. And we we are in in various discussions mostly in the US, but but also some some in other parts of the world.

Daniel O'Connor (32:03)
Okay, okay. obviously, yeah, producing your own lithium, mean, that's, yeah, I mean, as far as lithium, again, we haven't covered that as…

Anurag Bajpayee (32:14)
So so we like

to take this approach, Daniel, even when we took the approach with our water treatment business, when we came up with something

Really cool, something that was really valuable. We didn't try to sell it to someone who can then install it in their own full system. We decided we will build the entire system, right? And therefore, we were able to go to the end user, which is the semiconductor fab or the data center or the pharma company. Same way here, by taking our destiny in our hands, we're not trying to sell this.

piece or this piece to someone who's going to put a process around it and figure out the permitting. We are actually going to use what we have in an end-to-end solution to produce the lithium and then go directly to the end user of the lithium, which are the battery manufacturers, for example, or the car manufacturers, for example.

Daniel O'Connor (33:15)
No, it's very exciting. mean, you become the means of production. mean, you become the total value chain pretty much. And then it's about connecting to your point with the market, with the OEMs or the automobile companies, the battery companies. Yeah, that's a big deal. Very big deal.

Dustin Olsen (33:40)
This is big deal. So one final question for you, Anurag, is where do you hope to see the company in five years with this new facility and and other ventures that you guys have going on?

Anurag Bajpayee (33:54)
So look, I I think the on the lithium side in five years I definitely see us producing lithium at not one but multiple sites. and of course our initial

focus is in the producing lithium from produced water from oil field produced water but there are other brines out there that that this is just as applicable to. so producing lithium and being one of the world's foremost brine-based lithium miner really out there. on the rest of it ⁓ look

The rest of Gradiant outside of alkali is today.

For lack of a better phrase, becoming the water layer behind this AI economy. You know, we are providing source water, treating the wastewater for semiconductor fab, we're providing source water, treating the wastewater, managing the cooling lobes for data centers. That is extremely critical. And it is only growing. So I think if you know Gradiant is the water layer that forms the backbone of the economy.

on

AI economy and if alkali is the leading brine-based producer of cr critical minerals, I think we would have made some headway along along achieving our mission. I don't know if we'll ever fully achieve it. You know, grand grand goals are often

Dustin Olsen (35:24)
Absolutely.

Anurag Bajpayee (35:30)
never fully met, but but that's okay. You strive to strive to achieve them every day.

Dustin Olsen (35:37)
Absolutely.

Daniel O'Connor (35:37)
.

Dustin Olsen (35:37)
Couldn't agree more. And honestly, this discussion has got me looking at water a little bit differently. And I would imagine a lot of our listeners are probably feeling the same way. So if somebody would like to reach out to you or someone at your company, where's the best place to go?

Anurag Bajpayee (35:55)
I mean they can they can reach out to us. ⁓ they can they there's a contact page on our website. I'm sure they can find us on LinkedIn. feel free. I mean we're we're always all years to questions, suggestions,

people who are excited and want to make a difference, because, you know, we we need inspired inspired people on our team as well to to ⁓ help accomplish this these goals.

Dustin Olsen (36:24)
Absolutely. well Anurag, thank you so much for being on our podcast and sharing your insights and more about your business and the processes you guys are developing with us. It's ⁓ truly mind blowing. It's really exciting what you guys are doing.

Anurag Bajpayee (36:40)
Thank you guys and thank you for such an enjoyable, enjoyable discussion.

Daniel O'Connor (36:40)
the