EnergyX has secured a 10-year, $2 billion contract with energy trading house Trafigura for 100,000 metric tonnes of lithium, strengthening the Texas-based company’s plans to build large-scale extraction projects in the US and Chile.
The agreement covers lithium from EnergyX’s Black Giant project in Chile and Project Lonestar in East Texas. Teague Egan, the company’s founder and chief executive, described it as the largest offtake agreement in the history of direct lithium extraction (DLE).
“To have that type of customer is not only really encouraging for us, but also really validating to the rest of the market,” Mr Egan said. “This is actually the single-largest DLE offtake in history. That’s a cool little feather in the cap.”
EnergyX plans to begin construction next year. Black Giant is intended to start production by the end of 2028, initially producing 7,500 tonnes of lithium a year before expanding to 52,500 tonnes annually by 2030.
Project Lonestar is scheduled to follow with a 15,000-tonne facility in 2029, eventually reaching 50,000 tonnes a year by 2031. The company acknowledges the timetable is ambitious, but says the Trafigura contract should help attract further buyers, investors and lenders.
The agreement also supports EnergyX’s application for a $690 million loan from the US Export-Import Bank. The company has separately received $225 million from Italian energy group Eni.
EnergyX bets on direct lithium extraction
EnergyX was founded after Mr Egan became interested in lithium during a trip to Bolivia in 2018. He studied the country’s salt flats and the potential of their lithium reserves, while also examining what he regarded as outdated methods used across the industry.
“As an entrepreneur, I knew there had to be a better way. That was my ‘aha’ moment,” he said.
The company has developed filtration technology for DLE, a process that involves drilling wells, pumping lithium-bearing brine to the surface, processing it and returning more than 90 per cent of the brine underground. EnergyX says the method can extract lithium in about two days, compared with evaporation ponds, which can take up to two years.
DLE requires substantial upfront investment and has not been widely adopted by established lithium producers. EnergyX initially intended to license its technology to existing operators, but later decided to acquire its own resources and develop projects itself.
That strategy has led the company to build a land position in Chile and across the Smackover Formation in East Texas and south-western Arkansas. It has also completed demonstration projects in Texas and Chile, including a Chilean facility capable of extracting 170 metric tonnes of lithium a year.
EnergyX’s plants remain demonstrations for now. The company says commercial-scale operations will begin with Black Giant and Project Lonestar.
The Smackover region is considered a promising area for US lithium production because its reserves are held in an underground aquifer and require DLE. Standard Lithium is expected to begin construction on the first major DLE project in the formation early next year, while ExxonMobil and Chevron have also acquired extensive acreage in the region.
Mr Egan said EnergyX’s own filtration technology would help it compete as domestic lithium production develops. The company is also exploring a project in Utah.
From music and Tesla investment to lithium
Mr Egan, 38, grew up near Fort Lauderdale, Florida, before moving to Los Angeles to attend the University of Southern California. As a student, he founded a record label and a sports agency.
His label signed Boston rapper Sammy Adams, who reached number one on the iTunes hip-hop chart in 2010. Mr Egan has said that declining a deal involving his label and Interscope Records was one of his biggest regrets, although he believes greater success in music might have prevented him from founding EnergyX.
He invested some of his music earnings in Tesla in 2013, when the electric vehicle company had a market capitalisation of less than $10 billion. He said proceeds from that investment helped him start EnergyX.
His father, Michael Egan, is a member of the EnergyX board. The elder Mr Egan became the majority owner of Alamo Rent a Car, expanded it nationally and sold the business in 1996, remaining its chairman until 2003.
“I’m a serial entrepreneur. My dad was a serial entrepreneur. I learned from him,” Mr Egan said. “I don’t have an engineering or a chemistry degree. I’m an entrepreneur. I’m a problem solver. I feel like I have a Ph. D. in engineering from working at EnergyX for eight years.”
He has also spoken openly about his admiration for Elon Musk and the growth of electric vehicles, battery storage and autonomous transport. EnergyX is headquartered in Austin, Texas, where Mr Egan said he regularly sees the development of self-driving vehicles and robotaxis.
Global lithium demand has risen by more than 400 per cent this decade to more than 1.5 million metric tonnes a year, driven by electric vehicles and battery storage. It could approach four million tonnes by 2035, according to figures cited by EnergyX.
Mr Egan wants EnergyX to produce between 500,000 and one million tonnes of lithium a year by 2040 and become the world’s biggest lithium company. He has also said he still hopes to run for president of the United States.
