Another big news from the new energy industry!
Buffett is investing heavily in lithium, a key upstream material in the new energy vehicle industry chain.
On the 4th Eastern Time, Western Oil Company, which Buffett holds heavily, announced the establishment of a joint venture with Berkshire Hathaway Energy (BHE), a subsidiary of Buffett, to deploy TerraLithium's direct lithium extraction (DLE) technology and related technologies for extracting and commercializing high-purity lithium compounds from geothermal brine.
BHE Renewables stated in a press release that TerraLithium is a wholly-owned subsidiary of Western Oil Company and holds a patent for DLE technology, which has the potential to process any lithium containing brine into high-purity lithium.
BHE Renewable Energy operates 10 geothermal power plants in Empire Valley, California, which process 50000 gallons of lithium rich brine per minute and produce 345 megawatts of clean energy. The joint venture has launched a project at BHE's renewable energy empire valley geothermal facility to demonstrate the feasibility of using TerraLithium's DLE technology to produce lithium in an environmentally safe manner.
Alicia Knapp, President and CEO of BHE Renewable Energy, said, "We are delighted to collaborate with Western oil companies to seize this opportunity and make Imperial Valley a global leader in lithium production."
BHE Renewable Energy plans to build, own, and operate commercial lithium production facilities in Empire Valley, California. The joint venture also plans to license the technology and develop commercial lithium production facilities outside of Imperial Valley.
Richard Jackson, President of Land Resources and Carbon Management Operations at Western Oil Company in the United States, said, "By leveraging our expertise in managing and treating brine in our oil, gas, and chemical businesses, combined with BHE's deep knowledge of renewable energy in geothermal operations, we can advance a more sustainable lithium production approach. We look forward to collaborating with BHE Renewable Energy to demonstrate how DLE technology produces the key minerals needed by society to achieve net zero goals."
As early as a few years ago, Buffett began to pay attention to the potential of geothermal lithium extraction. The geothermal power plants operated by BHE Renewable Energy Company not only provide a large amount of clean energy for the local area, but more importantly, the geothermal brine processed by these power plants is rich in lithium. In 2019, BHE Renewable Energy Company began promoting geothermal lithium extraction projects; In 2020, the project received approval from the California Energy Commission. If the project validation is successful, commercial operation is planned to begin this year.
Western Oil is Buffett's heavy holdings, currently holding over 34% of the shares, and Berkshire Hathaway is the single largest shareholder of Western Oil. It is reported that Buffett made his first investment in Western Oil in 2019 and has significantly increased his holdings for three consecutive quarters since the first quarter of 2022. In early February this year, Buffett increased his holdings in Western Oil for three consecutive trading days, purchasing a total of 4.3 million shares.
As of the close of June 5th local time, Berkshire Hathaway's US stock was at $618000, up 0.09%, with a market value of $887.94 billion.
Western Oil Company closed at $59.84, a decrease of 0.08%, with a market value of $53.056 billion.
With the continuous growth of global demand for lithium, more and more oil giants are entering the development of lithium resources. The International Energy Agency predicts that the usage of lithium batteries required for electric vehicles and energy storage will significantly increase in the next two decades. The World Economic Forum has predicted that global lithium demand will rapidly increase in the coming years.
Lithium is a key component of electric vehicle batteries, consumer electronics products, and energy grid storage batteries. It is also used for industrial applications in the manufacturing of glass, ceramics, and pharmaceuticals. According to data from the International Renewable Energy Agency, the demand for lithium batteries is expected to increase tenfold between 2020 and 2030, in line with the growth in battery demand.
In addition to Western oil, American oil giant ExxonMobil has also entered the lithium extraction industry. Last year, ExxonMobil announced the launch of a lithium production project in Arkansas, with plans to achieve large-scale lithium production in the coming years, with the goal of providing lithium resources for a large number of electric vehicles.
In addition, the national oil companies of Saudi Arabia and the United Arab Emirates also plan to use lithium resources in saltwater to achieve economic diversification and profit from the global electric vehicle market. Saudi Crown Prince Mohammad bin Salman is promoting economic diversification and investing in the construction of an electric vehicle center. His entry into the lithium industry is an important part of his economic diversification strategy.