Work of trucks and the excavator in an open pit

Thursday Thoughts with Micheline Nadeau Fairbank: Harnessing Nevada’s Lithium Potential

Nevada, known for its rich mining history, is set to become a key player in the lithium industry, driven by the global shift towards renewable energy and the critical role of lithium in battery production. As lithium is declared a critical mineral in the United States, Nevada’s unique geological landscape presents significant opportunities for the mining sector. That’s why we sat down with Micheline Nadeau Fairbank in our Reno office, to explore the current state of lithium mining in Nevada, the regulatory environment, and the potential challenges that lie ahead in this evolving sector.

What specific lithium projects are there in Nevada that stand out to you?

Nevada is home to the only operational lithium mine in North America, located in Esmeralda County near the town of Silver Peak. Owned and operated by Albemarle Corporation, this lithium brine extraction mine utilizes a process where groundwater with dissolved lithium is harvested and evaporated to concentrate lithium carbonate. The refined product is then transported to a refining facility for further processing.

Another significant project on the horizon is the Thacker Pass project in Humboldt County, just northwest of Winnemucca, NV. Poised to extract lithium from sedimentary clay ore, Thacker Pass has begun construction, with full production expected by 2027. This project represents a major development in the region, highlighting the growing interest and investment in lithium mining within Nevada.

Why is lithium mining going to be so important to the Nevada mining industry and overall Silver State in the future?

Lithium is of paramount importance in the global transition to renewable energy, and the United States declared lithium a critical mineral for development within the United States to reduce reliance on international material supply chains, which creates national and economic security threats.

Based on the State’s geologic history, there are many known and suspected lithium deposits throughout the state, which creates significant economic opportunities. Not only does the presence of lithium deposits in Nevada create opportunity, but Nevada’s rich mining history and robust regulatory structure provide exploration for mining companies, along with the public, a well-administered regulatory space to support mining and protect the state’s cherished natural resources.

What mining laws and regulations are there that specifically affect lithium mining in Nevada?

Depending on the source of the lithium – hard rock, sediment/clay, or groundwater – they each present differing regulatory structures. Hard rock and sediment/clay deposits generally do not have any specific regulations governing the development of the mine for lithium extraction, and the typical process of mine development governs these mine operations. However, lithium brine deposits are governed differently because the lithium is present within the groundwater source. Exploration of lithium brines are governed by Nevada Revised Statutes and Nevada Administrative Code Chapters 534B, which addresses dissolved mineral resources.

Those looking to explore for lithium brine deposits must either obtain a permit to drill a dissolved mineral exploration well, subject to limits as to the quantity of water that may be extracted and duration for the exploration activities, or obtain a water right permit from the Nevada Division of Water Resources to extract groundwater for lithium exploration and groundwater development.

What legal/regulatory hurdles do you anticipate that lithium mining in Nevada will face in the near future?

The expansion of lithium mining in Nevada does not come without its challenges. Environmental and cultural concerns are at the forefront of the conversation, with potential conflicts arising from the impact of mining activities on local ecosystems and water resources. Many of Nevada’s groundwater basins are already over appropriated, posing significant hurdles for new mining projects that rely on these water sources, and of those approximately half of those are considered to be over-pumped where the extraction of groundwater exceeds the annual recharge to the system. This creates challenges for new mining projects if the mineral deposits are in these areas, as uncommitted water supplies may be limited or non-existent forcing mine projects to purchase existing rights to support their project needs.

Another emerging trend is increasing scrutiny around endangered and threatened species. Most recently the decision by the United States Fish and Wildlife Service to agree to decide whether to list the Fish Lake Valley Tui Chub under the Endangered Species Act is the latest example of where the heightened scrutiny may have an impact on proposed lithium mine development by Ioneer’s Rhyolite Ridge Lithium-Boron Project in Esmeralda County.

However, this scrutiny is not limited to fish species, rather plant species, spring snails, bats and birds are all potentially impacted by mine development and are subject to increased scrutiny from Environmental Site Assessments through Environmental Impact Statements to federal and state permitting.

For groundwater brine deposits, this can be even more challenging as the current proven technology for bine extraction is reliant on evaporation, which is a 100-percent consumptive use of the extracted groundwater. Therefore, very large duties of groundwater permits are needed to support brine extraction technology at the moment. Other brine deposit challenges include impacts to freshwater resources that may be hydrologically connected to the brine deposit where large brine withdrawals may cause adverse impacts to the fresh water supplies. Still, another challenge is hydrologically connected spring sources, which also may be adversely impacted by large-scale groundwater withdrawals.

Final Thoughts

As Nevada continues to explore and develop its lithium mining capacity, understanding the complex legal and regulatory landscape is crucial for stakeholders. Fennemore, with its experience in supporting environmental and lithium mining clients, is at the forefront of navigating these challenges. The firm’s expertise in regulatory matters and commitment to sustainable practices provides a solid foundation for advancing the lithium mining industry in Nevada.

With the right balance of development and environmental stewardship, Nevada can harness its lithium deposits to fuel not only the state’s economy but also the global transition to renewable energy. The journey of lithium mining in Nevada is just beginning, and it promises to be a pivotal chapter in the story of America’s energy future.

Get MORE. Insights

Stay ahead in the legal world – subscribe now to receive the latest insights and news from Fennemore Law Directly in your inbox!