As portable electronics get more popular and the market for electric vehicles takes off, demand for lithium—a critical element in rechargeable lithium-ion batteries—could soar. Yet just two countries, Chile and Australia, dominate global lithium production.

California startup Simbol Materials thinks it can increase domestic production of lithium by extracting the element, along with manganese and zinc, from the brine used by geothermal plants.

In the late 1990s, the U.S. produced 75 percent of the world's lithium carbonate, but now it makes only 5 percent. This is, in part, because U.S. manufacturers couldn't compete with low-cost lithium chemicals from Chile. The U.S. produces no manganese at all. "Yet we have this resource, already being harnessed for geothermal power production," says Luka Erceg, Simbol's CEO. "This is an enormous opportunity to harvest clean renewable energy and produce critical materials in a sustainable manner."

Worldwide demand for lithium chemicals was about 102,000 tons in 2010. This is expected to go up to as much as 320,000 by 2020, mostly because of increased electric-vehicle use. The world's largest lithium resources are estimated by the U.S. Geological Survey to be in Bolivia. Most manufacturers, including the world's largest, in Chile, typically make the material by pumping brine into pools to evaporate in the sun for 18 to 24 months. This process leaves behind a concentrated lithium chloride that's converted into lithium carbonate. The only U.S. producer, Chemetall Foote, drills for brine at Silver Peak in Nevada.

Simbol plans to piggyback on a 50-megawatt geothermal plant near the Salton Sea in Imperial Valley, California, that pumps hot brine from deep underground to generate steam to drive a turbine. The plant currently injects the brine, which contains 30 percent dissolved solids, including lithium, manganese, and zinc, back into the ground after the steam is produced. Simbol will divert the brine from the power plant, before reinjection, into its processing equipment. There, the still-warm brine will flow through a proprietary medium that filters out the salts within hours. Simbol has also acquired the assets and intellectual property from a now-defunct Canadian company for a purification process that creates the world's highest-purity lithium carbonate. Erceg expects to compete with the lowest-cost Chilean producers, which produce lithium at $1,500 a ton.

Simbol currently runs a pilot plant that filters 20 gallons a minute. The commercial plant, near Salton Sea, will begin construction in 2012 and will have the capacity to produce 16,000 tons of lithium carbonate annually. The world's third-largest producer, by comparison, makes 22,000 tons. By 2020, Simbol plans to triple production by expanding to more geothermal plants, Erceg says. But for now, it is buying low-grade lithium carbonate from other manufacturers for purification, and it expects to sell the high-purity product overseas before the end of this year.

Other lithium-mining projects are planned or underway around the world, including two more in Nevada. Keith Evans, a geologist and industrial minerals expert, says that if they all come online, global production in 2020 could be over 426,000 tons, far outstripping demand. Nevertheless, more U.S. production could make the country self-sufficient. Plus, he says, Simbol could have an advantage over other U.S. companies. "If their process is as good as they say it is, it could be a very-low-cost producer," Evans says. "It is potentially a very exciting project, if it works."