Key Highlights

  • The US has roughly 115 proposed lithium mines nationwide as it seeks to reduce reliance on China for the critical mineral.
  • Researchers at Northwestern University warn that growing water Scarcity in the western US could undercut lithium production plans.
  • Nevada's Thacker Pass mine, backed by the Trump administration, has already faced community opposition and legal challenges over water usage.
  • Rystad Energy estimates only 7 of more than 100 announced US lithium projects will be operational by the end of the decade.

Water Availability Emerges as Key Obstacle to Mine Development

Water scarcity has become a growing political, legal, and financial obstacle to building a domestic US lithium industry, according to a report from Northwestern University researchers. The US has seen roughly 115 proposed lithium mines emerge across the country as the Trump administration has invested in projects including Lithium Americas' $3 billion Thacker Pass mine in Nevada. Lithium production is water-intensive, and researchers warn that developers could increasingly face permitting delays and legal challenges tied to water use as climate change intensifies drought conditions in the western US.

Thacker Pass has already faced community opposition, including a since-settled lawsuit from a Nevada rancher over water usage, while Blackstone Minerals' Green River lithium project in Utah has also faced litigation.

Climate Change Expected to Intensify Water Disputes

Researchers said climate change is likely to intensify disputes over water rights as droughts become more frequent in the western US, creating potential conflicts between Mining companies, agricultural users, and urban areas over limited water supplies. The Dallas Federal Reserve has noted that many US lithium projects will require significant upfront investment, with some projects expected to cost more than $1 billion, while water scarcity increases the risk that delayed projects may never reach completion.

Developers Turn to New Extraction Technologies

Some developers are experimenting with direct lithium extraction technology, which can reduce water loss during the extraction process compared with traditional methods. According to industry data, 21 lithium projects are currently proposing to use the technology, including Standard Lithium's planned mine in Arkansas. Lithium Americas has set out plans to recycle 85% of water used at its Thacker Pass Facility and reuse it multiple times. Despite these efforts, industry researchers expect the US will remain largely reliant on lithium imports, with Rystad Energy projecting domestic production will meet only 5% of global Demand by 2030 and that just 7 of more than 100 announced projects will be operational by then.