Lithium Companies Fight Over Water in the Arid Great Basin

Over the past few decades, the United States has imported most of its lithium from Chile and Argentina, but there’s one major domestic source of the mineral—Nevada. Clayton Valley, a remote basin in the nation’s driest state, is home to the Silver Peak mine, where lithium is extracted in gridded ponds that turn neon blue as they recover one of Earth’s lightest elements through solar evaporation. 

Albemarle, a North Carolina-based company, runs Silver Peak as the only active lithium mine in the U.S. But over the past decade, amid a growing demand for electric vehicles and batteries to store electricity from intermittent renewable sources, dozens of mining companies have rushed to the area, vying for the element critical to the energy transition and the water that’s key to extracting it from the Earth.

Mining operators across the West have faced major barriers in the global race for lithium. Mines come with large footprints that can disrupt wildlife habitat, harm cultural sites and put pressures on communities. On top of all that is another major challenge posing a barrier for lithium projects in the western U.S. and Clayton Valley: Competition for limited water supplies.

“All these companies can sue each other all they want to,” said De Winsor, a commissioner for Esmeralda County, Nevada, who has been closely monitoring the water situation playing out within its borders. “All we want to do as a county is protect the citizens of the county.”

Albemarle claims it holds the rights to nearly all the groundwater in Clayton Valley, leaving little room for more companies to develop scores of additional mining claims. Water is so scarce here that two companies looking to mine in Clayton Valley recently filed requests with state regulators asking for permission to import groundwater from nearby valleys.

Exactly how much water is sustainable to use in this area is an open question. Many estimates looking at the volume of water stored in Nevada’s aquifers are based on science dating back to the 1960s. Even in cases where groundwater use remains below the sustainable yield, pumping can affect nearby areas or dry up springs, conflicting with other water rights. 

In proceedings to settle water disputes, as with an ongoing hearing on Clayton Valley, different parties often present different ideas and modeling of groundwater to show how the aquifer might respond to more use.

“There are models and then there are models,” said Jeff Fontaine, executive director of the Central Nevada Regional Water Authority. “I think a lot of this comes down to that very issue.”

What happens with water here matters because Clayton Valley and the surrounding valleys have been at the epicenter of Nevada’s lithium boom. Companies ranging from speculators to well-funded ventures have proposed more than a dozen projects to get lithium from brine or clay in Clayton Valley and the nearby valleys that pockmark the Great Basin. 

And in the months to come, how water is allocated in Nevada’s lithium valley could change—if a venture backed by oil services giant SLB, formerly known as Schlumberger, has its way. 

For several years, SLB’s subsidiary, NeoLith Energy, has been working to get a pilot plant permitted near the Silver Peak mine and prove-up a new technology known as direct lithium extraction, or DLE. The technology promises to consume less water, take less time and disturb less land. 

Like other proposed mining projects in Clayton Valley, SLB is targeting lithium dissolved in salty groundwater, so it needs a portion of the water rights Albemarle claims to pump that brine to the surface.

In 2021, SLB’s partner filed for water rights, a filing that has led to a tense dispute between two lithium mining projects with major backers. They have fought over this water in court and in a state regulatory hearing that began in January and could decide who controls water in Nevada’s lithium valley.

Albemarle is not ceding any of its water without a fight, arguing that the DLE operation could damage the aquifer and conflict with its operations. But the company sits on more water rights than it has historically needed for its operation.

To a competitor like SLB, Albemarle’s holding onto this water violates the “use it or lose it” rule of Western water law, the idea that individuals and businesses cannot retain water rights indefinitely. The rule aims to prevent speculation by entities that might hold onto an unused water right in hopes that its value will increase, but state regulators have the discretion to grant exemptions. 

They have granted Silver Peak more than 20 “extensions of time” since the 1980s, though the state recently renewed a small temporary water permit for SLB’s pilot plant, recognizing that the Silver Peak mine has not used more than 70 percent of its water rights since 2022. 

It’s that continued lack of use that has frustrated operators in the area. In 2022, an executive told The Nevada Independent that Albemarle was working to maintain a “monopoly through holding water hostage” and that other businesses have faced similar issues with the company.

With the state hearing pending, neither SLB nor Albemarle would comment on the water rights. Albemarle has stated, in the past, that it plans to expand its mine and increase its water use.

Nevada is not the only place in the Great Basin where there is tension and competition among different operators competing for land and scarce water supplies. Earlier this month, Utah passed legislation to start looking at a regulatory framework for brine extraction. 

“It seemed really important to have some good policy around how we manage” lithium brine, said Bridger Bolinder, a Republican member of the Utah House of Representatives.

The legislation also tasked the state with studying potential regulations for brine operations. In Nevada, the Center for Biological Diversity has pushed lawmakers to fund a study that looks at where lithium can be extracted without substantial harm to communities or the environment. 

Patrick Donnelly, the Great Basin director for the group, has been tracking more than 83 lithium projects in Nevada, with nearly half in Esmeralda County and bordering Nye County. In many valleys, the claims for projects are concentrated in specific hotspots believed to hold brine. DLE projects present a particular challenge, he said, because regulators must consider pumping up the brine and reinjecting the water underground after the lithium has been removed. Without planning and action from the Legislature, he said, “it’s going to be chaos.”

“We need a plan and this effort is meant to be in collaboration with the mining industry, not in opposition to the mining industry,” Donnelly added.

In 2017, the Nevada Legislature resolved one issue facing lithium companies in Clayton Valley, where Albemarle held nearly all the water rights but others had valid mining claims and wanted to research the brine. In such cases, the state now grants a small amount of water for exploration. 

But even companies that have started exploring cannot mine without water rights. 

“Having the mining claims does not allow them to continue to mine if there are no water rights available,” said Rob Ghiglieri, who leads the Nevada Division of Minerals.

Watching Clayton Valley closely are local politicians like Winsor. The valley is tucked between the small towns of Tonopah and Goldfield, both of which grew and shrank with the booms and busts of past mining for silver and gold, a cycle some analysts say might now be hitting lithium. 

For more than a century, mining companies have targeted minerals from this part of the state, and water has always been hard to find. Studying the area’s groundwater in 1917, hydrologist O.E. Meinzer wrote that “in an arid region, such as this, water for mining and milling and for domestic uses at the mining camps is frequently very difficult to procure.”

Winsor has filed protests on behalf of Esmeralda County with state regulators raising concerns about how pumping in Clayton Valley, and importing water from nearby areas, could affect the community’s supply. 

He said the lithium mines interested in developing in the county—the state’s smallest by population—seem to underestimate how much water they need, and “when they need more water then they are wondering why people won’t just hand it over to them.”

“The mines could be able to bring in quite a bit of work … to the area, and a lot of income to the area,” he said. “But if you don’t have the water, how are you going to operate the mine?”