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Lithium mining in Nevada: Business opportunity or headache?

On Behalf of | Oct 7, 2020 | Business Law, Business Litigation

Lithium is a common geological commodity that is growing in popularity. The metal is an important component to certain batteries, commonly used in electric vehicles. The need for lithium is expected to increase in coming years. The well-known electric car company Tesla, for one, has announced that it expects to face “significant (battery) shortages in 2022 and beyond” due to a lack of readily available lithium.

The announcement is one of many that signals the potential for growth in this marketplace.

Should mining companies consider lithium?

Entrepreneurs in western states like Nevada are no strangers to discussions about mining. Although relatively new to the discussions, miners are considering lithium. In one example,  Tesla announced a lithium mining plan in the state to help gather the valuable product to supplement use in their vehicle’s batteries. The plan would address the lithium shortage noted above but has faced hurdles. Tesla found the permitting process slow and difficult. The corporation also struggled with clarity about the project’s ability to access water.

Making things even more difficult, critics have pushed back against the project. These critics stated chief executive officer Elon Musk’s plan to use table salt and water to extract the needed lithium from clay was “too simplistic” and not feasible.

These and similar hurdles faced by those who are interested in getting into the lithium mining marketplace are simply that: hurdles to navigate while building a successful lithium mining enterprise. Business owners are wise to be aware of these hurdles before beginning the project so they can plan wisely. In some instances, it makes sense to mitigate the headaches that come with dealing with hurdles like water rights claims, mineral rights and any resulting litigation by delegating these tasks to outside counsel.

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