Bill would establish regulatory framework for Nevada lithium

State officials said during a Tuesday Assembly natural resources committee hearing that Assembly Bill 52 would clarify a system that requires explorers to rely on water well regulations and waivers to sample brines for lithium from drilled wells.

“With the growing need for lithium locally, nationally and internationally it became apparent that regulations need to be developed” to protect groundwater and geothermal resources, Pam Robinson, Gov. Brian Sandoval’s policy director, told the committee.

Lithium is used in car batteries, ceramics and antidepressants. In the United States, it is mined only in Nevada.

The proposal comes amid an increased demand for lithium with the arrival of the Tesla Gigafactory, which makes car batteries east of Reno, and Faraday Future, an electric car maker that has announced plans for a plant in North Las Vegas.

The bill would define a borehole, which is used for initial exploration to sample water for chemicals; and wells, which can be used for sampling and pumping.

Richard Perry, administrator of the Nevada Minerals Division, said the bill does not change existing property and water laws. The legislation also limits the water that can be pumped from an exploration project to no more than 5 acre-feet. Anything beyond that must go through the state’s existing water appropriations process. One acre-foot of water is enough water to cover an acre 1 foot deep.

State Engineer Jason King said his office supports the legislation, which clarifies the exploration process.

Richard Harris, a mining attorney in Reno, said he represents four clients that move than 2,600 claims for lithium exploration. Millions set aside for exploration cannot be spent now, he said, stressing the need for the legislation.

Dave Shaddrick, President of the Nevada Mineral Exploration Coalition, said the current permitting process is unclear, calling the bill a “very good solution to that problem.”

Opposition testimony

The only lithium brine mine operation in the United States is at Silver Peak in Esmeralda County. It opened in 1966, and is now owned by Albemarle Corp.

Leo Drozdoff, an Albemarle Corp. lobbyist, opposed the bill. He said water rights are a fundamental part of exploration because lithium is a dissolved mineral. He raised concerns that the bill does not outline how boreholes and wells would work.

“The greatest difficulty that’s been going on to date is the boreholes are being drilled out in Clayton Valley and they’re not being monitored,” he said.

Lithium only has four producers in the world, with much of the mining done in South America.

The demand for lithium brine exploration is high, with 13,258 claims filed throughout Nevada by 25 companies in 18 different basins as of January, state data show.

Contact Ben Botkin at bbotkin@reviewjournal.com or 775-461-0661. Follow @BenBotkin1 on Twitter.