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XThe Lithium Race Takes Shape in the Salton Sea
David Shultz
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Located roughly a hundred miles east of San Diego, the Salton Sea is California’s largest landlocked body of water, for now.
Measuring 5 miles across and 35 miles long in its current form, the lake was created by diverting water from the Colorado River into the region for agricultural purposes. Once a vacation destination renowned for its wildlife and wetlands, a series of environmental mishaps and mismanagement have left the lake toxically salty, shrinking and often malodorous. Conditions have gotten so bad that Palm Springs Life Magazine called the region’s transformation “the biggest environmental disaster in California history” in March of 2020.
But against this unlikely backdrop, new life—or at least new industry—is scrambling to set up shop in the region. The Salton Sea, it turns out, is rich with lithium, an element that has taken center stage in the world’s transition to clean energy and its ever-growing demand for batteries. From smartphones to electric vehicles, there’s a pretty good chance that the last battery you used had lithium ions inside. Prices for the metal reached an all time high in September, and futures are up more than 400% since the start of 2021. With Biden’s new economic policy outlined in the Inflation Reduction Act, there are strong financial incentives to move battery production back to North America.
If that’s going to happen the Salton Sea could very well become the lithium capital of North America, or to paraphrase Governor Gavin Newsom, the region could become the “Saudi Arabia of lithium,” and the players are already starting to assemble.
Currently, there are three companies attempting to set up plants in the Salton Sea for direct lithium extraction: EnergySource Minerals, Controlled Thermal Resources and BHE Renewables, a branch of Berkshire Hathaway. All three companies have similar business strategies from a high level, all of which involve geothermal power plants. These plants, which are common in many parts of the world, draw hot, salty water from deep in the ground to create steam which drives a turbine to produce electricity. What makes the Salton Sea so special is that its geothermal brines just happen to contain lithium.
In a 2017 study, researchers from the U.S. DOE Office of Energy Efficiency and Renewable Energy analyzed more than 2,000 samples of geothermal fluid from U.S. sources and found that only 1% had significant lithium concentration. This rare confluence of geothermal activity and lithium presence provides an opportunity for companies to generate electricity and mine lithium simultaneously.
Beyond their marriage of geothermal energy and lithium extraction, the three companies begin to diverge.
According to former dot.LA engagement editor Luis Gomez — whose newsletter Lithium Valle, is essential reading on this topic — EnergySource seems to be out in front early.
“They claim to have the technology that’s patented, they claim to have done the research, they claim to have the funding, and they claim they're ready to go and start production,” says Gomez. “They are kind of considered the canary in the coal mine.”
According to a report from the United States Department of Energy, EnergySource plans to eventually scale production up to over 20,000 metric tons of lithium hydroxide per year using its proprietary Integrated Lithium Adsorption Desorption technology.
Construction on the plant was slated to start earlier this year, but has been delayed. EnergySource has said publicly that lithium production might begin in the second quarter of 2024, but it’s unclear whether this date will also be pushed back. The company has a long history of operating in the region, having run the John L. Featherstone geothermal plant since 2012. The new venture into lithium would leverage that same plant, but without more details about how their proprietary technology works, there’s not much to do but wait and see.
One potential problem facing all three lithium extraction companies is that the Salton Sea geothermal brines are not the same as the brines in evaporation ponds similar to those in Argentina, Chile and Bolivia, where more than half of the world’s lithium is produced. Specifically, the deep geothermal brines in the Salton Sea contain more silica and transition elements, which may complicate the chemistry of purifying the lithium. Still, many researchers are extremely bullish on the prospect of tapping into these reserves. Alex Grant, The Principal at Jade Cove, a research organization focusing on direct lithium extraction technologies, says that much of the skepticism surrounding the technology can be attributed to competing financial interests that are trying to squash the nascent tech’s potential in favor of an established method.
Lithium Mines in the Atacama Salt Flats, Chile from an altitude of 15km via Google Earth. The facility is about 10km wide.
Google Earth
For its part, BHE Renewables, operating as CalEnergy, runs a fleet of 10 geothermal plants in the Imperial Valley. The company had previously announced its intent to set up a direct lithium extraction demonstration plant sometime before the end of 2022 to assess the viability of lithium extraction. If that pilot program goes well, the company could build a commercial-scale facility as early as 2026 with a projected annual capacity of 90,000 metric tons of lithium.
Obviously, having the backing of Berkshire Hathaway comes with advantages and capital. Add into the equation another $15 million in DoE grant money obtained last winter, and BHE appears to be well positioned as a major player in the long term.
Finally, there’s Controlled Thermal Resources. As the only company not already operating a geothermal business in the region, CTR is something of an outsider and dark horse. By 2024, the company hopes to build both a geothermal energy plant and a direct lithium extraction plant to operate in parallel, projecting a capacity to extract 300,000 metric tons of lithium carbonate equivalent annually by 2030. As dot.LA previously reported, Controlled Thermal Resources has partnered with Statevolt, a company that intends to build a $4 billion gigafactory nearby that will run on power from CTR’s geothermal plant and make batteries from the lithium it extracts. It’s a beautiful closed-loop business model. But again, all of this relies on the direct lithium extraction technology, and details are scant.
According to Gomez, despite the typically cut-throat nature of the energy industry, the relationship between the three upstarts in the Salton Sea is often surprisingly cooperative at the moment.
“They want the others to succeed because it kind of gives them the confidence that their technology is also eventually going to succeed,” he says. “It gives confidence to investors.”
Which is all to say, there may well be space for all three companies if the technology is as solid as they claim. If that’s the case, the Salton Sea and its surrounding region may have yet another miraculous transformation up its sleeve.
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David Shultz
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs
04:10 PM | June 06, 2024
🔦 Spotlight
In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭
![](https://media.beehiiv.com/cdn-cgi/image/fit=scale-down,format=auto,onerror=redirect,quality=80/uploads/asset/file/6495a108-705a-4617-be42-f70d8e4dbed2/image.png?t=1707434870)
Image Source: Disney
Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.
For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮
🤝 Venture Deals
LA Companies
- ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
- Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
- Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
- Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
- AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
- Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
- 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
- LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
- Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.
LA Venture Funds
- M13 co-led a $6.5M Seed Round for Code, a micropayments startup building upon the kin (KIN) cryptocurrency. - learn more
- Wonder Ventures has garnered $102 million in fresh capital commitments. - learn more
Actively Raising
- ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
- CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
- Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
- Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
- StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more
If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!
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Christian Hetrick
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Why Scrubs Maker FIGS is Being Sued in California Court
10:59 AM | October 19, 2022
'We've Branded an Unbranded Industry': FIGS Co-CEOs Trina Spear and Heather Hasson on Their Epic IPO
Last August, FIGS, the medical scrub startup based in Santa Monica, was sued for false advertising and misleading business practices. This week, the company is in court arguing it didn’t need to rely on any unsavory marketing tactics and that its products sold more because they were better than its competitors.
The lawsuit, brought forth by Strategic Partners Inc. (SPI), a Chatsworth-based competitor that does business as Careismatic Brands, alleges FIGS co-founders Trina Spear and Heather Hasson violated advertising regulations by falsely claiming their scrubs are made to protect the wearer from bacteria or disease through the use of a chemical called Silvadur. In the lawsuit SPI cited the fact that FIGS said this chemical helps its scrubs reduce hospital-acquired infection rates by 66%, which SPI claimed was untrue and misleading.
The exact amount of money SPI is seeking from the suit isn’t clear. But the company did request numerous damages, including the costs of the suit and attorneys’ fees. SPI also asked for compensatory damages plus punitive damages and disgorgement of profits, which means the court could order FIGS to pay back part of the money it made selling its scrubs if the judge rules against them.
“What [FIGS] did is they came up with these false claims so that health care workers would pay premium pricing based on something that didn't exist,” said Sanford Michelman, attorney for SPI. He also said the company “is a get rich quick scheme.”
Unlike FIGS' direct to consumer model, SPI sells through a middleman, licensing out brands to mainly brick and mortar retailers.
Michelman claimed SPI has sources that used to work for FIGS that will testify FIGS’ 66% infection prevention claim wasn’t accurate, including a former stock boy and an infectious disease expert.
A FIGS spokesperson who was in court Tuesday said, however, he anticipated SPI will need to prove specifically that FIGS’ sales increased because of its allegedly misleading marketing, which could be a difficult task for the plaintiffs.
The suit also called into question other elements of FIGS’ business practices, including the company’s promise to donate “hundreds of thousands of scrubs internationally'' as part of its Threads for Threads program. Per the publication of the company’s first video ad for it, the program appears to have been set up in 2013 to donate one pair for every pair sold: The lawsuit alleged, “these misrepresentations regarding donations are part of FIGS’s broader plan to deceive the public into believing that FIGS and FIGS scrubs are special, when they are not special.”
During opening statements, law firms Bird Marella and Munger, Tolles, & Olson argued on behalf of FIGS that SPI uses a similar chemical in its medical clothing.
Back in 2021, FIGS created an entire website to explain its side of the story. On the site, the medical clothing startup called the lawsuit “baseless attacks” from an older competitor that’s simply angry it lost market share to a new upstart and wants to “thwart competition.”
To that end, FIGS’ chief legal officer said the lawsuit was an attempt by SPI to “stifle” competition and drive it out of the market. He called the litigation “absurd” and said it won’t hold up in court.
This is a developing story. Have a tip? Contact Samson Amore securely via Signal at 401.287.5543 or Samsonamore@dot.LA.
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
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