Episode 184: Dave Snydacker, Lilac Solutions
Today's guest is Dave Snydacker, Founder and CEO of Lilac Solutions.
Lilac Solutions is a lithium extraction technology company based in Oakland, California. Lilac has developed a patented ion exchange technology that facilitates lithium production from brine resources with high efficiency, minimal cost, and ultra-low environmental footprint. Lilac's mission is to scale global lithium production to support the electric vehicle industry and energy transition.
Dave founded Lilac in 2016. He is a materials engineer and an expert in battery technology, with experience spanning multiple battery startups developing next-generation materials and manufacturing processes. Dave holds a Ph.D. from Northwestern University and a BA from Wesleyan University.
I was eager to sit down with Dave and learn more about Lilac Solutions. Dave and I explore his path to founding Lilac Solutions, the process of commercializing his research, and the early stages of funding for the startup. We also discuss why lithium is critical to batteries and Electric Vehicles, how to scale ion exchange technology, and the importance of government incentives and policy to a successful EV transition.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded October 21st, 2021
In Today's episode we cover:
Overview of Lilac Solutions
Dave's climate journey and what motivated him to found Lilac Solutions
The challenges facing the lithium supply chain
Overview of Lithium technology, how it's mined, and the existing sites
Why the technology was lacking for lithium extraction
The process of building a company on the back of his Ph.D. research
The early sources of capital for Lilac Solutions and the role grants and equity capital played in funding the company
The initial customer base and how they integrated customers into the early phases of R&D
The history of ion exchange as a technology solution for batteries
Lilac's first pilot project and how to scape the operation
Lilac Solutions' business model
The ethics of lithium mining
The most significant barriers to the EV transition and the critical factors that influence the scaling of EVs
Links to topics discussed in this episode:
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Hello, everyone. This is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change, and try to figure out how people like you and I can help.
Today's guest is Dave Snydacker, founder and CEO at Lilac Solutions, a lithium extraction company based in Oakland, California. Lilac's unlocking new lithium resources to provide the raw materials needed for electric vehicles and grid batteries. Dave is an expert in battery technology and holds a PhD in materials engineering from Northwestern University.
I was excited for this one because electrification is so important, and as the EV transition plays out, we're going to need a lot more batteries. But in order to get the batteries, we need resources to power the batteries, and in order to get the resources to power the batteries, lithium is important.
Now, how lithium is extracted matters, how cost-effectively it can be extracted matters, and how much of it we can extract also matters. We cover a lot in this episode, including an overview of battery technology, and lithium, and where it fits in the current extraction processes, where they missed the mark, or where the growth and supply might be stunted, what some levers could be to unlock that additional supply in a way that's cost-effective and can keep up with the demand that we are seeing, and will see in the future.
And we also talk about Lilac Solutions, where they fit in, their progress to date, where they're going, and also, how to bring breakthrough technologies like this to market, in general, what Dave learned along the way, and what advice he has for other founders looking to do the same. Dave, welcome to the show.
Dave Snydacker: Hey, Jason. Great to be with you.
Jason Jacobs: Did you tell me... Well, you did tell me before we hit recording, that this is your first podcast ever?
Dave Snydacker: I think this is my first podcast ever. Yes. And I've been a long-time listener, a huge fan of the show, so really excited to be on.
Jason Jacobs: And not only that, we, I mean, we didn't know each other, but we went to the same alma mater for undergrad, Wesleyan.
Dave Snydacker: Yeah, which is pretty unusual that I run into Wesleyan folks in the cleantech space, as a smaller school without an engineering program, so always super excited when I do.
Jason Jacobs: Amazing. Well, to kick things off, what's Lilac Solutions?
Dave Snydacker: Lilac Solutions is a lithium extraction technology company. We've developed a new process to increase production of lithium raw materials to supply the battery industry, and electric vehicle manufacturers.
Jason Jacobs: And h- how did you come to be working in this problem space, and on this company? What's your origin story? And you can start wherever you like. You can start at birth, you can start in college, wherever. You have artistic freedom.
Dave Snydacker: Yeah. Great. So, I grew up in Rhode Island on the ocean, and environment was always a big thing for me, personally, and sea level rise, in particular, was something that was clearly going to impact my hometown, and, and so wanted to work in the environment on the climate problem.
Did undergrad at Wesleyan. There was no engineering school there, but got really interested in biochemistry. So, my undergrad was focused on biochemistry, but by the time I finished college, I was feeling like I needed to work on batteries or, or solar panels. Like, that was where all the action was at, and needed to somehow get into that space, so...
Jason Jacobs: What year was this, Dave?
Dave Snydacker: 2009 is when I finished undergrad.
Jason Jacobs: Uh-huh. And what made you choose batteries and solar panels, as the two areas to choose from?
Dave Snydacker: Well, I had looked... As a biochemist, I had looked at agriculture and biotech, biofuels, but then you just looked at the efficiency of photosynthesis, the efficiency at which a plant can convert sunlight into energy or fuel, and it was very, very low. And so, I was just in awe with the kind of natural world, and amazed by all the, the machinery of the cell, which I had been studying. And yet, I knew humans needed to do much better than that, in order for us to maintain our modern standard of living, and address climate change.
So, the solar panel and the battery together were that very basic machinery of life, of, of harnessing the sun and putting it into a usable form, but just so much more efficient than what a cell could do. And so, that's what kind of pushed me away from biochemistry and into materials engineering, which is what I focused on in grad school.
Jason Jacobs: Great. And then, at what point did the idea for Lilac begin seeping in, and how did that come about?
Dave Snydacker: Yeah. So, at grad school, I worked on batteries. So, I joined the Wolverton Group at Northwestern, which is, was an awesome experience. We had, like, six or seven people working on advanced batteries with funding from the Department of Energy, and from Ford Motor Company, and so most of my time there I was working to improve the performance of batteries, and to improve the durability of batteries.
So, working on new cathode materials, new anode materials, and electrolyte materials, the main components inside the battery that store energy and help the battery function. That was my core focus.
And I also spent a lot of time at Northwestern working with student groups. So, one of the things that I realized, when you spend a lot of time in higher education, as I did, is that professors are really good at giving you the basics, at getting you up to the technical state of the art, but in the coursework, you're not going to get exposure to what is happening two years from now, five years from now. Usually, that's not something you can get in the coursework.
So, I got together with a bunch of other students at Northwestern, other PhDs, undergrads, business students, and we formed a new student group, which centered around technology seminars. So, we would get together every week and somebody would present on a different aspect of the new clean energy economy.
And it was in that seminar series where I made some of my best friends, but also learned a tremendous amount about how my engineering skills could be applied to industry, looking forward. And Lilac really came out of that experience.
So, I was leading a couple seminars on battery manufacturing and on electric vehicles, and I started getting these repeated questions about the battery supply chain. People would say, "Okay. So, you're going to get us off of oil and on to lithium, but aren't we just going to trade the oil cartel for a new lithium cartel?" Or, they'd ask, "Is there really enough lithium? Are we going to run out of lithium?"
And initially, I would sort of laugh, and say, "Oh, well. You know, any economist will tell you that if prices go up, new supply will come on, and the problem will be fixed, so don't worry about it."
But then, I started to try to answer the question in a bit more detail than that, and realized there were way more question marks than there were answers, and that lithium supply, in particular, was a huge challenge for the electric vehicle industry, and a big opportunity. And so, started working in lithium extraction.
Jason Jacobs: So, before we jump in to, to what you started working on, can I just double-click on that? What were some of the challenges that you observed, and what were some of the open questions that kept you awake at night about the lithium supply chain?
Dave Snydacker: Yeah. So, the challenges were twofold. First, the total lithium reserves, and reserves are the body of raw material in the earth that are economically feasible. And there were only, maybe 5 or 10 major deposits globally that were capable of producing lithium economically. And, you know, 5 to 10 projects was not going to be enough to build a global EV supply chain. So, the kind of, the size of the reserve was number one.
And then, number two, there were some new resources, some bigger resources, spread across a larger number of sites, that were interesting, but the technology needed to upgrade those speculative resources into economic reserves, was lacking. And the work that had been done to develop technology for that purpose was pretty narrow and had not been very fruitful.
So, it was on the resource size, and on the production technologies, where I saw some serious concerns, and a great opportunity.
Jason Jacobs: Okay. Well, I have some questions, but before I ask them, I'm going to restate what I think I just heard, just to make sure that I have my facts straight.
So, basically, you knew that lithium was an essential component to power the widespread EV adoption, and when you looked, there were only a handful of deposits that could... where you could get lithium economically, and that wasn't going to be nearly enough. And there were other places that were more prevalent, where you could potentially get those deposits, but in order to do so economically in that broader spectrum, beyond the 5 or 10, you needed technology that didn't yet exist, and there was a gap. Is that right?
Dave Snydacker: Exactly right.
Jason Jacobs: Okay. Well, my first question, then, is with the, the 5 or 10 sites where you could do so, economically, what were the criteria with the existing tech, not the tech that you were envisioning, but with the existing tech, what would it take to do so economically, to fit into that 5 or 10?
Dave Snydacker: Yeah. So, at the time, and this is still mostly true today, there are only 5 or 10 interesting sites, and they were divided into two different categories. So, the categories were brine resources, which are salt water deposits, and that's where Lilac's focus is, but the other category is hard rock ores, which looks more like a conventional mining project.
And about 80% of the world's lithium resource is in the brines, but when you look at new production over the last 10 years, 80% of that has been from the hard rock. So, there was a imbalance between where most of the resource was, and where most new production was coming from, and that really highlighted the challenge.
But, getting back to your question of, what does it take to bring those resources into production, on the brine side, you need a high grade of lithium and you need the ability to permit very large evaporation ponds.
Evaporation ponds are the technology used to produce lithium from brine resources today. You basically pump the naturally-occurring salt water up from underground, spill it into a long series of evaporation ponds that can be up to 10 kilometers across, and then over a course of up to two years, that brine is slowly concentrated. And you remove all the low-value salts, which is 99.9% of the brine, typically, so most of that material in the brine is removed.
And then, finally, you end up with a concentrated lithium chloride solution at the very end. But, a lot of the lithium gets lost in the process, and it's a process which is very difficult to permit and very slow to bring online, and then, limited to that small number of resources.
So, there were... All those reasons meant that brine projects weren't able to quickly ramp production, in order to meet demand for electric cars. And so, those brine resources, they've been losing market share.
Jason Jacobs: So, the 5 or 10 that existed at the time, were those more brine, or were those more hard rock?
Dave Snydacker: So, this is really kind of 5 to 10 of the biggest projects. There're basically three or four big brine projects, and you know, at the time, there was only one large hard rock project. Now there's more like five large hard rock projects. But, the number of brine projects, of large, successful brine projects, has basically stayed the same.
Jason Jacobs: And when you saw that there were other potential resources that could be accessible, but the tech was lacking, what did the landscape look like in terms of those resources, and how was the tech lacking?
Dave Snydacker: So, the landscape, I always envision as a pyramid. And there's a... For people who have studied oil and gas, or mineral resources, there's this classic pyramid where at the top you have a small number of sites with a very high grade resource, and as you go down the base of the pyramid, you get to lower concentrations of lithium, but a much larger resource base with more sites that can be developed.
And so, outside of the existing production, which was three or four brine projects, there were dozens of sites with large amounts of lithium, but at a lower concentration, where conventional technology would not be applicable. And it's those sites that seemed like the frontier for lithium. That was going to be the answer to how we solve this problem, and brought online the new production needed for electric vehicles.
Jason Jacobs: What was it about the existing tech that inhibited it from being a viable enabler for these lower-concentration projects?
Dave Snydacker: The primary problem with the conventional technology was its inability to ramp production, and that's related to its limitation to high-grade resources, the fact that you can't use it at many new projects, and it's also related to the low recoveries. So most of the lithium that they pump out of the ground is not recovered, and so that was also a challenge for that technology.
Jason Jacobs: Uh-huh. And so, as you dug in and started uncovering these insights, then what?
Dave Snydacker: Yeah. So, the, the big moment for me was realizing there was a category of technology called, ion exchange, which could use oxide materials to extract lithium. And my PhD was focused on designing new oxide materials to absorb and release lithium in a battery. That's how a battery works. You have these oxide powders in the cathode that absorb and release lithium every time you, you charge and discharge.
And what I realized is, I could use that concept and apply it to a new mining process for extracting lithium from the salt water deposits. And that was really the moment where I realized that, that my skillset could actually make a big impact on lithium production.
Jason Jacobs: So, were you still in an academic setting at the time?
Dave Snydacker: Yeah. So, I was still in my PhD at the time, working on battery materials, and I started a new project at Northwestern to look for new ion exchange materials. So, we came up with a list of new materials at the university, and we published that work.
Later, I would go on to start Lilac and develop the Lilac product, which is a similar concept, but a different set of materials and technologies.
Jason Jacobs: Uh-huh. And so, when you started uncovering the gaps, and you started piecing together that potentially you could use this new process to make lithium extraction possible in some of these projects that historically had not been economical, or had not been feasible, did you immediately jump to aspiring to make a company out of this that's a profit-seeking commercial entity? Had you thought about being an entrepreneur before you pieced together these insights? Talk a bit about that process and how building a company became the right vessel for you.
Dave Snydacker: I wanted to work for a startup because I just believed in the power of innovation and capitalism that would come together in a startup and... But I looked at all these... I watched all these failures in the battery space. So, I had sort of assumed that I would just join a battery startup, and then I watched, like, probably 300 battery companies announce that they had the next breakthrough battery technology, and then just hit a brick wall. When the materials wouldn't really cooperate, it would fall apart.
And so, I was starting to second-guess my career path of joining a battery startup. I had gone out to interview for a bunch of battery companies, and didn't really click with any of those companies, and was sort of a reluctant entrepreneur, at first. I was a little bit intimidated by the business end of things. I just had no exposure to accounting, and, you know, how I was going to pull the, the financial end of things together. I was very intimidated by that.
Initially assumed I would need to go find a CEO to be CEO for me, so I could focus on the technology, but was surrounded with a really great community of people at Northwestern, including Samir Mayekar, who started a company called, NanoGraf, and Ben Hernandez, who started a company called, NewMat.
And those guys really encouraged me to just go for it. Said, "You know, hey. You can really figure this stuff out. You know, if an MBA can do this, it's not rocket science. You can definitely, you know, figure the numbers out here, and you know, we can help coach you through this," and, and that was tremendously helpful for me and making the leap. And so, when I finished the PhD in 2016, I made that jump and incorporated the company.
Jason Jacobs: And we could probably spend a whole episode on any one of these chapters, so we need to be careful not to, not to get spun up in the weeds in any one particular spot, as tempting as it might be. But, with the benefit of hindsight, so you started the company in 2016. What's the Cliffs Notes version in terms of the key chapters along the way, and where are you today?
Dave Snydacker: Yeah. So, I started the company in 2016, relocated out to the Bay Area, and we've been scaling up by 10X every year. So, basically, every year for the last four years, we've moved into a new, bigger lab space, scaled up the technology by 10X, and raised another financing round. So, it's been a really rapid journey, and we just raised our Series B.
Jason Jacobs: So, you incorporated the company. Did you have a team at that time? Or did you get some capital to go find a team, or... Because there's a lot of these chicken-and-egg scenarios when you're starting something from nothing, and so, after you incorporated, or at the time of incorporation, what did you have, and then how did you break that chicken-and-egg cycle? Where did you start? What was the first pin that fell into place?
Dave Snydacker: Yeah. So, initially, it was just me moving out to the Bay Area, and the first-
Jason Jacobs: By yourself.
Dave Snydacker: Yeah. And I applied for some accelerators out here that didn't click, but did start to develop a community with the other companies in those accelerators, and that have worked with, with some of the investors out of Boston, out of the Bay Area. And the first hire was Amos Indranada. He was 19, a double major at UC Berkeley, and was just amazing, super hard-working, very creative, and has really been, you know, the backbone of the technical team here since 2017.
And he kind of turned around and helped recruit more students out of UC Berkeley, we got connected with the Stanford community through Dave Danielson at Breakthrough Energy Ventures, and linked up with our chief development officer, Tom Wilson, and our head of South America, Felipe de Mussy, and yeah, have just been really building the team out here in the, the Bay Area ever since.
Jason Jacobs: So, the first capital that you used to make these early hires, was that equity capital, was it grand funding? Where'd it come from?
Dave Snydacker: Yeah. So, the, the first capital was friends and family, so raised $45,000 dollars, which was just enough to get a proof-of-concept done, but we managed to sign a first customer contract with that, and then our COO joined shortly thereafter to really help ramp things up. Then we, we raised a seed round at the end of 2017.
Jason Jacobs: And when, when you're building a deep-tech company like this, where there's so much R&D to be done, but at the same time, there's a risk that if you come out the other side after years of R&D, that nobody's going to want your stuff. How did, did you navigate that, and what advice do you have for other aspiring entrepreneurs on how to na- navigate that in terms of the balance between just proving it out and getting it to work, which is a lot of work, but also, making sure that you're building something that, that people need?
Like, I guess what I'm asking is, who are the customers and how early did you integrate them into that cycle, and in what ways?
Dave Snydacker: Yeah. So, the customers are lithium brine project developers. So, these are junior mining companies that own rights to a lithium resource, but lack the technology to bring it into production. So, we partner with these companies to provide technology and services, and help them complete the engineering, and develop the project on-site.
So, so far, we've been doing engineering here in Oakland. We completed our first on-site pilot plant earlier this year, and we're getting ready to deliver additional pilots to multiple project sites in South America.
Jason Jacobs: How early did you involve them in the discussions in those earliest phases of R&D?
Dave Snydacker: Very early on, and that was something I, I learned at Northwestern. There was a strong startup program there, and one of the things they train you to do is just be fearless at making phone calls. So, you know, I was just, you know, cold-contacting people on LinkedIn, getting people on the phone, learning about their problems, pitching the technology, getting their feedback, so a very iterative process, learning from the resource owners about what they needed and doing that early on, even before our first seed round, really helped to super-charge our story.
Jason Jacobs: And so, if I'm hearing right, though, they're actually securing rights to these projects before they know that the projects are possible?
Dave Snydacker: Well, yes. So, in the mining sector, that's pretty typical. For example, for every one new gold mine that gets built, there are dozens of junior mining companies that go out looking for gold, acquiring mineral rights, and doing exploration work.
It's similar in lithium. With lithium, it's not as hard to find the resource, but there's more uncertainty around what the chemistry of the resource will be and how you'll be able to produce the lithium from that resource.
So, when I entered this space in 2016, there were dozens of companies that owned low-grade lithium resources, and didn't have a credible technology roadmap to actually bring those resources into production. So, it was quite speculative, and to this day, remains quite speculative. Many of these companies still don't have a credible roadmap, and, and that's why we're working hard to engage with these companies, demonstrate our capabilities, and, and help support bringing their projects online.
Jason Jacobs: Uh-huh. And so, without Lilac, what percentage of the projects that they acquire rights to, end up manifesting successfully, and then... I mean, maybe it's too early to say, but how do you anticipate that Lilac can help shift their batting average in that regard?
Dave Snydacker: Most lithium projects today, and most lithium brine projects, in particular, are not economically feasible with conventional technologies. So, they're really stalled, looking for a technology solution, or simply waiting for somebody to come in and buy them, and figure it out.
Jason Jacobs: Uh-huh. And so, have there been technology solutions that have been tried before Lilac came up with this ion exchange?
Dave Snydacker: So, there's a rich history of engineers working on this problem. The most prominent is the Livent story. So, there's a company called, Livent. It's a US-based company with a Argentine-based resource, and almost 30 years ago, they brought online a new project in Argentina using an innovative technology. And I have great respect for their team and, and what they did there.
They used an aluminum-based absorbent bead. The problem is, that bead has only worked for higher-grade lithium resources. The applicability to lower-grade lithium resources, or resources with higher impurities, has been extremely challenging.
So, in the last 30 years, a lot of other new entrants have tried to adapt this technology to lower-grade resources, and have repeatedly failed. So, that was the context by which Lilac came in. There'd been a lot of iterations around this one absorbent technology that had just not gained traction, and we were coming in with a new approach.
Now we weren't the first company to do ion exchange. There had been some academic work 20, 30 years ago, showing that certain oxide materials could work for lithium recovery, but the problem was in the performance of those materials. Clearly, new, better materials were needed to do that ion exchange reaction, and, and that's where we focused.
Jason Jacobs: So, given that there had been a bunch of cycles spent on technologies before, that hadn't manifested, did you encounter skepticism initially from these project developers about your new shiny thing?
Dave Snydacker: Absolutely. There were a lot of resource owners or engineering leads that I would be pitching, who would say, "Oh, ion exchange. That was already tried. That doesn't work." And educating them about the importance of materials engineering, that, you know, all ion exchange processes are not created equally, that our bead is much different than those that had been tried previously, and that allowed us to have some superior capabilities.
And what it really took was demonstrating the technology on brine samples. So, we would get people to ship us big tanks full of salt water so we could run the testing here in Oakland, and then provide a report back to them showing that the technology really works on their resource.
Jason Jacobs: Uh-huh. And so, as you were starting to show them the reports, and you were starting to, maybe at least get them intrigued to listen more, how does one go from that to what you just talked about, which is your first on-site pilot. Like, what are the twists and turns, and what are the key learnings that came from crossing that chasm?
Dave Snydacker: Engineering, a strong technical focus on getting the engineering right. And in our case, that includes both materials engineering, getting that, the ion exchange bead right, and chemical engineering, getting the overall process right.
And in the lithium space, in particular, there are a lot of junior mining companies that have skill sets on the mining, the project development side, but they lack that materials engineering edge. And so, that's where we try to focus, and build our brand around hard-core materials engineering, really tackling the toughest problems head-on, and then showing that our solution works, through tens of thousands of hours of test work.
Jason Jacobs: Uh-huh. And so for that first on-site pilot, what's the scope of that pilot, and what are you and the customer hoping to learn and prove?
Dave Snydacker: Yeah. So, every new mining project, you've got to go on-site and show that the process works in that environment, with that particular resource chemistry, before you can complete the engineering and build a project. So, that's the case in, in lithium, as well, so we did our first pilot in the western US, and this was with a very challenging brinery source, very, very high impurities, which would normally make lithium recovery impossible, or certainly, uneconomic. And we showed that the technology can maintain its performance, not only as we scale up, but also as we deploy out into the field.
You know, we did that in the middle of COVID, a very challenging year in 2020, but we were lucky to have our first pilot in the US, rather than in South America, you know, during that COVID period, and had some really good learnings on, you know, how to prepare for on-site deployment, how to gear up those teams, and how to, you know, react to changing conditions on the ground.
Jason Jacobs: Uh-huh. And I would assume, and correct me if I'm wrong, that the risks from going from zero to one, let's say, are quite different than the risks of going from, say, one to 50, or 100, or 1000. So, can you talk a bit about looking forward? So, with that first pilot under your belt, what are the big risks and what are the big proof points that need to happen between now and more wide-scale adoption?
Dave Snydacker: Yeah. So, our focus now is to deploy pilots to a, a larger number of project sites across the US and South America. With this first pilot behind us, most of the projects we're working on now are a much lower degree of technical difficulty, so we've got a high degree of confidence we'll be successful.
But still, of course, there are risks. There are risks to timelines. Permitting is very important in the mining sector. Project development can take a very long time. So, we need to make sure we are maintaining a really positive environmental profile, which allows for permitting to advance quickly, and we also need to make sure we can quickly and cost-effectively ramp up the production of our ion exchange beads.
So, we're already in a really good position, there. We have pilot scale, bead production here in Oakland, and we're looking to build a large bead factory in the western US. So, we'll probably be making some announcements there in the next couple of months.
But, yeah. Ramping up that bead production is critical, since those beads are the core aspect of the ion exchange process.
Jason Jacobs: And these beads, is that a different kind of bead than has been made, historically? Is that your own proprietary kind of bead, or what does that landscape look like?
Dave Snydacker: Exactly right. It's a new ion exchange bead, and ion exchange is very common in the metals processing space, or in water treatment, and every application of ion exchange has its own unique bead that's selected for a particular type of metal. And this has been developed for uranium production, for water treatment, but there had never been an ion exchange bead developed for lithium. And so that's what we focused on, developing that new ion exchange bead with a particular focus on lithium production, and we manufacture those beads in-house.
Jason Jacobs: So, is that the most proprietary and differentiating thing that Lilac does, is these beads?
Dave Snydacker: The bead is the core of the technology, but there is a lot of additional technology that goes around the bead. So, we have two engineering divisions. One division is focused on bead production, and the other division does everything else around the bead. So, designing, building, operating the chemical process equipment where the beads are loaded in, and then the brine is flowed through to capture the lithium.
Jason Jacobs: And the business model here, you talked about technology and services. I mean, is it, is it strictly a licensing and service model, or are you taking on any project risk and/or benefiting from any potential project upside?
Dave Snydacker: Yeah. So, we just announced our first joint venture with Lake Resources. Lake Resources is a publicly-traded lithium developer based out of Australia, and they own several projects in Argentina. And we're working with them to develop their flagship project, which is the Kachi lithium brine project in Catamarca, Argentina, and we've advanced through several rounds of engineering with Lake, now, and that's been done in partnership with Hatch Engineering, which is one of the top mining engineering firms, globally, and have been really great to work with.
And this joint venture is set up for Lilac to provide technology, on-site operations, and also a share in the financing, to help advance that project. So, we're very closely partnering with Lake on this project, now, and excited to go on-site with a pilot plant in Argentina next year.
Jason Jacobs: Amazing. And this is more of a general question, but when you think about building this type of capital-intensive business, how do you think about the different sources of financing? It sounds like you've done a lot with equity. Have you done much with grant financing, or project finance, or even philanthropic capital in the early stages, for that matter? And in hindsight, would you do anything differently than the decisions that you made to-date?
Dave Snydacker: Yeah. So, we didn't get much grant funding. Most of the Federal grant funding in the battery space was more focused on battery technology. But we did have a wonderful base of support in the philanthropic community, and in the impact investment community, in particular.
So, we worked with Prime Impact Fund very early on, and Matthew Nordan joined our board back in 2018. It was incredibly supportive, and a community around the Prime Impact Fund, the Prime Coalition, really rallied around Lilac to support us at, at the very early stages, which was incredible.
And then that, then led to Breakthrough Energy Ventures leading our Series A. So, mission focused, not philanthropic, but mission focused venture capital, and over the last 12 months, we've really seen the whole financial community pivot towards supporting climate solutions, which has been absolutely amazing.
Jason Jacobs: And switching gears, again, we've talked about the economics of lithium mining, we've also talked about the importance of lithium mining to power the electric vehicle revolution, and other important uses. What about the ethics of lithium mining? I hear a lot of criticism about the ethics of lithium mining, and I'm curious. In your view, what are the primary criticisms that you see, and, and which of them are warranted, and which of them might be either misinformed or overblown?
Dave Snydacker: Yeah. This is something that certainly attracts a lot of attention, and I think there's a whole, you know, basically, class of pundits out there who like to have a sort of gotcha take on the battery supply chain, and say, "Oh, well, you know, you're moving away from oil, but it's not a solution, because there's still environmental impact."
The reality is that lithium production today is already much, much better for the global environment, in terms of CO2, as compared to gasoline. There are some local impacts, though, and those local impacts are important. It is extremely important that local communities feel respected and consulted, and feel like they are benefiting from development in their area, in their community. And so, it's important that when projects are developed they have a limited impact on land and water, and that's, that's front of mind for us as we look at these projects.
The major environmental benefit for Lilac, is the reduction in the physical footprint at the surface, so today, the evaporation ponds require, you know, up to approximately 10,000 acres, whereas our projects are tens of acres. And so, that reduction in physical footprint is important, particularly for communities where tourism is important, or where there's a spiritual connection to the land.
Jason Jacobs: What's the why behind Lilac? Why do you and the team get up every day and do the work that you do?
Dave Snydacker: For me, the big driver has always been around climate. Growing up in a coastal community in New England, where the whole culture revolves around the beach and the ocean, and knowing what's going to happen to coastal communities if the Greenland ice sheet is lost and eventually the Antarctic ice sheet is lost... and unfortunately, you know, that's the path we're on today. Those are just unacceptable outcomes to me. So that was always the big driver.
And now, you know, there's certainly a big wealth creation opportunity. You know, we're pushing to build a big category-defining company which will be a big player in supporting the EV transition.
Jason Jacobs: And if you're successful beyond your wildest dreams with Lilac, what have you achieved?
Dave Snydacker: If Lilac is successful, we'll be the biggest producer of lithium in the world, in terms of the projects that we partner on, supplying a tremendous amount of lithium. And we will be creating an industry that can provide the large volumes of raw materials, at a reasonable, predictable cost, to battery manufacturers and electric vehicle factories so they can scale, so they can plan to ramp up and continue building the production capacity.
Jason Jacobs: Uh-huh. And I, I have a couple of questions that are less Lilac-specific, and more focused on the EV transition generally. One of which is just, we talk about how Lilac is an important enabler of accelerating and broadening that EV transition. What are the biggest barriers that you see, that are inhibiting that scale?
Dave Snydacker: Yeah. I think the biggest barriers to battery production, and production of electric vehicles, are the metals needed to go into the batteries. So, that includes lithium. It also includes nickel and cobalt. However, there are some alternatives, at least partial alternatives, to nickel and cobalt. They've been, you know, replaced with iron, in many cases, and so, you know, lithium is really emerging as the critical piece of that battery supply chain.
A lot of investment needs to be made, and, and factories to produce the batteries, and to produce the cars, but those factories are relatively rapid to build. They can be built in two or three years, but conventional mining projects, they take 10 years, and hence the bottleneck.
Jason Jacobs: And then, a followup question. As the EV transition plays out, what are the important factors to make sure that when it plays out, it does so in a way that actually helps with decarbonization and doesn't make things worse?
Dave Snydacker: Yeah. I think the good thing about electric vehicles is their fuel gets cleaner every year, as the grid gets cleaned up, even as oil production gets more challenging and environmentally damaging, so huge benefits. However, the grid operators and electric utilities need to do work to make sure that electric vehicles are leaning most heavily on wind and solar, and timing the charging for the most economic efficiency, and the lowest greenhouse gas emissions.
Jason Jacobs: If you could wave a magic wand and change one thing that's outside of the scope of your control, that would most accelerate the progress of the EV revolution, and of your efforts with Lilac, what would you change, and how would you change it?
Dave Snydacker: I would love to see the government support electric vehicle deployment in the US, broadly, rather than picking winners, or picking technologies, to offer incentives to help people buy or lease electric vehicles. I think that's the tide that lifts all boats and, and helps the industry scale and compete.
Jason Jacobs: Uh-huh. So the more demand for EVs, the more demand for lithium, the more demand for lithium, the more demand for Lilac, and the faster people switch out of their fossil car.
Dave Snydacker: Correct.
Jason Jacobs: Nice. And where do you need help? For anyone listening that's inspired by what you're doing, and I happen to know anecdotally, from our members and audience, that there's a lot of people that are interested in and inspired by what you're doing. Who do you want to hear from? How can we help you?
Dave Snydacker: Yeah. Thanks. We are hiring rapidly, now. So, we're hiring a lot of engineers in materials, and mechanical, and chemical engineering, and also, field engineers and field operators, adventurous types who are excited to go down to some really far out locations in South America, in high desert, surrounded by volcanoes, to install and operate these processing plants. So, yeah. We're recruiting engineers. We're recruiting operators in a big focus on finding people to, you know, travel down to South America and work with our local folks down in South America.
Jason Jacobs: Nice. And is there anything I didn't ask that I should've? Or any parting words for listeners?
Dave Snydacker: Let's see. I don't, I don't have anything in particular. Just would say that this has been, you know, an amazing few years for me, personally, watching this whole industry grow and come together, and watching the impact investing move from seed stage to Series A, and now into growth equity, has been tremendously exciting, and, and I'm feeling more optimistic than ever that Lilac will be able to scale, and this whole industry will be able to scale.
Jason Jacobs: Well, I am, too. And I have to say that I've only been focused in this area for the last few years, but relative to how I was feeling, and the anxiety that I felt about the magnitude and stakes of the problem, the longer I work in this area and the more immersed that I become, the more optimistic that I find myself becoming. And that's not because it's going to be easy, or it's not because the stakes aren't high, and it's not because things aren't going to continue to get uglier. I think they will, but, you know, the snowball's picking up steam as it comes down the mountain here from a solutions standpoint.
I'm not just talking about innovation for all the angry Twitter people that are going to say, "Innovation isn't the only thing that matters. Like, everything matters, but we, we're pushing i- in every way." And they're going to start feeding each other, and I think we're seeing some early signs of that, already.
Dave Snydacker: Absolutely. I, I think the problems are going to be solved, and the question is, how fast can we solve these problems now, because it's not a binary outcome with climate. It's keeping as much of the fossil fuels in the ground as we can, and to do that, we've got to go fast.
Jason Jacobs: Yeah. Well, Dave, awesome what you're doing, awesome that you took the time to come on our show, and I feel so honored that we were your very first podcast, as well. Hopefully, we, we lived up to the hype here.
Dave Snydacker: Yeah. Thanks so much. Really excited to have the opportunity to catch up with you and your community, and stay in touch.
Jason Jacobs: Sounds great. We're wishing you and the Lilac Solutions team every success.
Dave Snydacker: Thanks so much.
Jason Jacobs: Hey, everyone. Jason, here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is dot-C-O, not dot-com. Someday, we'll get the dot-com, but right now, dot-C-O.
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