How Adionics Took a Bold Stand in the Competitive DLE Landscape

Imagine transforming the way we extract one of the most critical elements for our green future—lithium. This is where Adionics’ cutting-edge advancements and strategic pivots could reveal the company to be a game-changer in the Direct Lithium Extraction (DLE) market.

Wanna learn more? Let’s dive into it:

with 🎙️ Gabriel Toffani – CEO at Adionics

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Resources:

🔗 Have a look at Adionics’ website

🔗 Come say hi to Gabriel on LinkedIn

🔗 Check out my Lithium deep dive

🔗 Get a glimpse into the various DLE generations

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Full Video:

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Breaking Ground with Innovative Technology

As you know, I’ve been navigating the interface between lithium and water technology for some months now.

Well, in that jungle of cutting-edge new technologies, I have to say, Adionics stands out – for a full set of reasons.

Adionics is a Direct Lithium Extraction player, yes, but with a disruptive approach. When most of DLE players nowadays build their stacks around membranes, sorbtion or adsorbtion technologies, Adionics went for a different core technology: solvent extraction.

The perks of Solvent Extraction as a DLE process

Adionics’ solvent extraction is highly selective, targeting lithium with unparalleled precision while minimizing the extraction of unwanted elements like boron and magnesium.

This precision means:

• High Purity: Achieving extremely pure lithium chloride.
• Cost-Effective Processing: Simplifying the transition from lithium chloride to lithium carbonate, reducing costs.
• Sustainable Practices: Lower water consumption, making it environmentally friendly.

Industrial Readiness and Pilot Projects

One of the standout moments in this week’s discussion was Gabriel’s assertion that Adionics is ready for industrial-scale deployment. Their technology isn’t just theoretical; it’s been tested in real-world conditions. Adionics has built pilot projects designed to operate at high altitudes, such as 3,800 meters above sea level in the lithium-rich regions of South America.

Gabriel elaborated on their pilot projects:

• Altitude Adaptation: Pilots constructed to function efficiently at high altitudes, reflecting the company’s focus on the lithium triangle—Chile, Argentina, and Bolivia.
• Demonstration Plant: Adionics is setting up a demo plant in San Antonio to showcase their technology’s robustness and efficiency in extracting lithium from various brine sources.

Adionics’ Strategic Pivot: from Desalination to Lithium

Adionics wasn’t always focused on lithium. The company initially aimed to revolutionize desalination. However, recognizing the burgeoning demand for lithium and the inadequacies in current extraction methods, Adionics made a bold pivot in 2017 towards lithium extraction—a time when lithium prices were low, showcasing their foresight and innovative spirit.

Unique Approach: Flionex Technology

Adionics’ Flionex technology is another feather in their cap. This proprietary solvent extraction process was developed entirely in-house, from molecular creation to large-scale industrial application. The technology involves three crucial steps:

1. Extraction: Flyonics selectively extracts lithium from brine, ignoring most other elements.
2. Washing: A minimal water wash to remove any remaining impurities.
3. Regeneration: Releasing pure lithium chloride ready for further processing.

Competitive Edge in the DLE Market

In a market crowded with over 50 DLE companies, standing out is no small feat. Gabriel confidently stated that Adionics’ competitive edge lies in their efficiency at varying lithium concentrations, especially in the range of 200-250 ppm and higher. This adaptability ensures they remain competitive across different brine sources, whether in the lithium triangle or beyond.

The Future: Industrialization and Global Impact

As you’ll see in the full interview below, Gabriel shared ambitious plans for the future. Adionics is poised to move from pilot projects to full-scale industrial plants, with hopes to sign their first industrial contract soon. They are also exploring partnerships and opportunities in North America, Europe, and beyond, emphasizing a global vision for their groundbreaking technology.

In a nutshell

Adionics is not just disrupting the lithium extraction industry; they are redefining it with their innovative technology and strategic vision. Gabriel’s insights during our recording highlight the company’s commitment to sustainability, efficiency, and industrial readiness. As the demand for lithium continues to surge, Adionics is – I believe – well-positioned to lead the charge in delivering high-purity lithium through environmentally friendly methods.

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My Full Conversation with Gabriel Toffani on Solvent Extraction for Direct Lithium Extraction

These are computer-generated, so expect some typos 🙂

Antoine Walter: Hi, Gabriel. Welcome to the show.

Gabriel Toffani: Thank you.

Antoine Walter: I’m pumped up about that conversation because. You won’t remember me, but I remember you. we crossed path in Salta last year at the panorama mineral conference, you were speaking there. And, I was just sneaking on you, hoping to get to catch you.

And at the moment I thought I was able to grab you, you were leaving the building and entering a taxi.

Gabriel Toffani: Okay. So that’s not too late. Sorry about that. Thanks for having me first. And then sorry about this Santa, I was not aware about, but it’s now nice to know it.

The Core of Adionics’ Technology

Antoine Walter: But since then, you know, I wanted to go into the core of your technology What’s your number one challenge, which you’re solving.

 If you just had to give me one reason why your technology is the killer one, what would it be?

Gabriel Toffani: need to give you a few reasons because it’s a whole. So let’s say if I should be one, it’s extremely selective, right? Which makes it simple to use and then ones that you go from lithium chloride to Lithium carbonate that makes that part very simple and cheap But of course being very selective means that we have a very high yield the high purity We have a low water consumption.

maybe I will tell you then, why did I came to Adionix? But at the moment I decide to came, the technology was a very important thing . And at that time, I did believe what they told me, what Guillaume, the founder, told me. It’s not very modest, and I try to be humble, but I do think we do have the best technology of the market. I give maybe you hear this. Few times before, but this time is true.

Diving into Solvent Extraction

Antoine Walter: Actually, your technology has something which is for sure very different from all the other ones we’ve covered so far. It’s that you do solvent extraction and We covered membranes, we covered all the different types of adsorbent, which you could be using to extract lithium, but that’s the first time I’m covering and solvent extraction when I think you’re not fully alone.

I would expect Solvay to do something around that as well, but the way you do it, I would give it to you that you sound to be the only ones. Do you feel like the pioneer or do you feel like alone?

Gabriel Toffani: We feel that kind of unique technology. you can not really compare it to the others. I don’t know in detail, all the others, but I prefer to talk about our technology, and once again, we do think, it is very, very good one,

Antoine Walter: So before we go into the full story, what would be your best elevator pitch to Adionix?

Industrial Readiness and Pilot Projects

Gabriel Toffani: the Onyx, not only we have a good technology, but now we did try it with industrial pilots in real conditions, and we show that it is working. So my best elevator pitch to mining companies is that we are ready to go. I mean, everything is okay.

We can do an industrial plant tonight. So. It’s ready.

Antoine Walter: Well, given the elevator pitch, that gives me a good way to enter into the depth of it because your pilots on their technical notes, it’s written, they are built for operation at 5, 000 meters. Which kind of gives you a hint as to where you intend them to go into play.

Focus on the Lithium Triangle

Antoine Walter: How did you come to that conclusion that your place was mostly in the lithium triangle?

Gabriel Toffani: Well, I don’t know if I tell 5, 000 meters because there are not many places, but at least , there are many minds of 33, 800 and so on. , we communicate on that. We already made testing at a camera. at 2500. And then, we build the pilot considering the altitude. So all the technical decisions were done to try to adapt the pilots to real conditions.

As you might notice, we are waiting, and we will have it soon, a piece of land in San Antonio So we will install the pilot at three thousand eight hundred meters and , of course people can doubt about is that going to work or not at that alt. So I just give you a new, where we will start the pilot in San Antonio and it will work.

Because once again, people, our technicians, our process guys thought about that. When they designed the pilot. So it was done for that. we knew that our big market was the lithium triangle, right?

Antoine Walter: you say that you will have your own pilot in San Antonio, does that mean that you are the lithium developer there and you go end to end, or is it just a demo plan to prove the technology, but you don’t intend to build a 20, 000 tons of lithium carbonate equivalent plant,

Gabriel Toffani: we are not to kind of mining company today. Now, the idea with that site in San Antonio is to have a demo plant and industrial demo plant could be, we have a 15 tones, one in 250 tones. One will be one of them, or maybe both one day. So the idea in the beginning is to bring brines.

From different minds around, make the test, show that the process is working, show that it’s the steady process because when we make tests, it’s 24 hours a day during 1, 2, 3, 4 weeks, whatever, to show that not only that the results are okay, but the process is easy to handle. And then maybe one day when the process, everybody will be convinced that this is working and we have industrial plans, we will transform that maybe.

in a training center or something like that, but we are not going to produce lithium there. No, it’s not the idea.

Antoine Walter: you mentioned that the, this specific region in the lithium triangle is the natural place for you to go. But if I understand right for technology, it can go from 50 ppm up to 50, 000 ppm of lithium. as much as I agree with you that the only place where you would find these super high concentrations is in the lithium triangle, at 50 ppm, basically any produced water fields, oil fields, in the Middle East or in Canada would suit as well.

So why did you focus on The place where evaporation ponds, after all, work pretty well.

Gabriel Toffani: we can treat the brines on the range you mentioned. we need to be also, competitive, you know,you did speak to 20 DLEs companies, but I think there are more than 50 today. So we are in a market where you need to run to be the first. You need to show that you are good, but you need to show that you are competitive.

This is a business, right? So, we are very competitive, maybe at 200, 250 milligrams. And the more we go up in concentration, the more we will be efficient and competitive. We are looking to go to a lower end, because fly on eggs, there’s not only one single product. We will have few of them.

So we are making new research to go down and down in concentration. But while we find the perfect formula for 50 milligrams, we are addressing today something starting at 200, 250 milligrams up to how much you want, as you mentioned, 50 grams or something like that is possible.

The Flionex DLE Technology Explained

Antoine Walter: Flionex is your technology. can we explain how that works?

Gabriel Toffani: , I’m not a chemistry. I’m not the founder and I’m not a researcher, . I’m just an engineer, and I’m just a water engineer, . First, let me tell things, I find magic about the Flionex. The molecules of flying eggs were created here in our lab there downstairs, right?

there a molecule that did not exist before so the guys started to create a milligram and then a few grams Then kilograms that we use in our pilots and We are able to make tons and tons for an industrial plant. So it’s a product that was totally created, by, the ideas of gu de so that they found around the avionics chemical research team.

So how does it, where is a liquid you have the first step where you put the brine in contact with our fly OnX. A few technologies. If the concentration in the brine is about a low one, we use mixer settlers. If it’s a high one, we use centrifuge, but which are not our proprietary equipment.

Those are market equipment, , the same as the mining company used for other purposes the same equipment. So that’s the first step. The fly annex will extract the lithium. And when I said it is a very selective liquid, it means that we will not extract boron, potassium, magnesium, nothing because it’s impossible for the fly annex.

 We will extract a little bit of sodium and,calcium. But all the rest, we will not even touch it. No extraction at all, That’s why we think, we know it will be a very pure lithium chloride. Second step, it’s a kind of washing with a little bit of water.

Gabriel Toffani: Because the fly on eggs is already very pure. We just try to remove any impurity in the second washing step. And the third one, the fly on eggs has all the lithium in it. So we need to release the lithium. So , in the column, we have a counter current fly on eggs and pure water. And then the lithium chloride is already pure going to the production and the fly on X goes around all the time, goes back to the extraction, washing, regeneration and like that.

Antoine Walter: I know that’s prior to you joining the company, but just for me to understand how Adionics, which if I’m right, stands for Advanced Ionics Solutions,

Gabriel Toffani: Yeah.

Adionics’ Strategic Pivot to Lithium

Antoine Walter: I’m curious to understand When you understood that lithium was your home game, because from the dates, if I’m right, the pivots was in 2017 to lithium extraction, and 2017 is a time where the lithium price was very low.

So it was a bold move in 2017 to do that pivot towards lithium. Many have done the pivot in 2022. Cool for them, but it makes a lot of sense when you see that the price goes through the roof. What’s the backstory there?

Gabriel Toffani: , the initial idea of Guillaume was to be able to give drinking water to the whole world, drinking water coming from desalination, right? They even make a Masdar and there were another pilot. So I guess even if desalination was working very good, the desalination space was already very busy with big groups as the French ones and many others, , there are groups around the world doing desalination.

So I think to get, A main place in that world and being very competitive, maybe it was a little bit complicated. And in that time, the vision of Adionis was to say, lithium is going to develop, it’s going to be very important. And we do have a great solution for that. So the switch was on 2017, which that we are working on that for about seven years.

And I think it’s a good thing because if we are ready to industrialization today. It’s because we are working on that space for a long time, right? I don’t know if those who switch in 2022 they are ready for industrialization, but , it took took Tradionis some time to get where we are today, right?

Challenges and Opportunities in DLE

Antoine Walter: You mentioned industrialization and that is the big topic when it comes to DLE. I’m an avid watcher of the lithium sphere. I’m by no means a big expert in lithium, but I think I listened to every single episode of Jolory’s And he regularly takes a shot on DLE and says, Hey, by the way, Is DLE happening at full scale? And he’s right on that, that there is no commercial plans doing DLE end to end. So how big of a topic is industrialization? And when do you think that one company, be it you or another, will be doing an end to end?

Gabriel Toffani: You have already kind of DLE working, which is, the Arcadium DLEs in Argentina with resins and so on. And I guess, I’m sure, that Ahmed is going to start the plant . Also, but they are using their technology for their own, right? Then they can, the competitive space, , as you say, there’s no industrial plant.

So, when I’m telling you that we are ready for industrialization, it means that, we went through a process. That with the pilot plan, we certify that the process is working. And also we did go through a basic engineering project, to confirm what do we need, as industrial equipment.

Which is the exact CAPEX. I’m trying to guess the exact OPEX. We did already that. we are ready for industrialization. So if you say, when can we go to industrialization? I don’t know my colleagues, but we can go to industrialization right now. And we hope to sign the first contract this year.

You know, to sign a contract, it doesn’t depend only if your technology is ready. It depends on many other things moving in the lithium world. But we hope to sign a contract this year. For an industrial plant, of course.

Antoine Walter: Usually when you look at the marketing materials of a DLE company, I’m not saying you, you’re the exception so far. There is this table with the technology of everybody stacked in columns on an OPEX price chart, and then everybody’s on the right. And then the company, which is doing that presentation is on the very left and is much cheaper than everybody else.

And then you move to another company and they have the same chart, except that they are now the one on the very left and they are the cheapest. I have a hard time with silver bullets. I’m. Don’t believe that someone can solve everything and you were very straightforward by saying at the beginning what’s the right concentration at which you have the best efficiency today.

 That’s a lot of points in my personal scoring. So kudos for that. But where would you expect to land in terms of OPEX if you are blessed with a brine which goes to your ideal conditions for fly annex?

Gabriel Toffani: Well, wouldn’t say this confidential information, but it’s very difficult to answer to that question and I guess I will not, sorry about that. , let me explain to you why We are willing to do , what we know how to do. Right? So, what we are going to do with the mining company, we’ll have always our process engineer look in the process, and then you need a little percentage of refinement.

Fly on X every year, so we will guarantee that that is just a few percent that we will do it. Then you have local issues like what’s the price of the water was the price of the kilowatt and so on. So I cannot tell you about that. so it depends on many, many different things

we are not going to operate the plan. We are just going to give process support and fly your next refill. For that part, I could give you the figures, but they are just inside the, something which is bigger. And , I don’t control that.

Antoine Walter: First, that answer, I think I’d even prefer it to if you had just given me a number because that makes a lot of sense. Talking about the way to develop a project, you mentioned how you would have processed people looking at a brine, looking at a composition, then probably do some lab tests.

when do you start? So what’s the beginning of your scope? At what stage? Should a mining company reach out to you so that you can look at what they’re doing and up to where do you go? So you don’t do operation, you said that, but what do you deliver? Is it like the process and then they would have a company install everything or would you do like a turnkey solution and then they operate?

mining company, we can start talking when they. Just ask the question to themselves. Are we going to keep on making evaporation or we want to look at DLE or what do we want to do when they have the composition of their brain, or even if they guess, which is going to be the composition of the brain with all the tests we performed in the last year, we build a mathematical model.

Gabriel Toffani: So if you send me the composition of your brain tonight, I can tell you tomorrow, not the ideal solution. I can propose you curves with many solutions. If you want more purity than yield or more yield and purity, we can choose together, which is your exact point. And for that point, we will give you the result of what our deal is going to do.

And the rough idea about the, our part of CAPEX I will come back to the CAPEX and OPEX. So that’s the first step and with the years Our model is always correct at one two three percent difference because we make a lot of lab tests to correct the model second stage I’m talking to you from les jolis, which is south of paris.

We do have a quite a big lab here So we have a The pilot, the exact, the exact same process as in the industrial pilots, but in the lab, which is very good because it’s a glass, pilot. So you can see the fly on eggs, the water mixing. If you come and you are kindly invited to come, you see the process and you will understand everything very fast.

So second step is to propose to the client to do, we call it a clean lithium one, because we put its number with the tones equivalent, lithium chloride that we can produce every year. If you leave the lab working the whole year, we produce one ton, right? That’s why the other pilots, we call them CL 15 and CL 250.

 Then we can, go to the CL 15 and we can go also on site as we did with our shareholder SQM, we make. test in real conditions, right? So, , what are we going to propose to the mining company? Of course, we’ll perform ourself the basic engineering or the process book or call it as you want.

We will define the process, the size of the main equipment. to be able to guarantee that the process is going to work. That’s what we know how to do Then we are not constructors. We are not an erection company. We don’t know anything about pipes So we will need A kind of epc constructor that will take care of detailed engineering and we can supervise of course And that they will define, how many and how big are the pipes, instruments, cables, whatever you want.

We are not specialists in that, so we will not do that. We will just supply, the basic engineering. Of course, the first field of LionX. We will manufacture that and provide that to the client. The three main equipments, we will buy them because there’s equipment from well known suppliers, but we have a spec for that because it’s particular for our utilization.

And that’s it. Then we willsend process engineer on the side for startup commissioning, We need to make a refill of fly on eggs during the operation of the plant. And also, the brine can change, the conditions can change. So we propose to have a continuous process, survey that we helped the mining company to get.

You know, continuous improvement on the process that they get always what they want to get. Let me tell you one word about the second, model that we are proposing. And that’s based also in our all water experience. We are proposing a kind of BOT BOO model. If a junior miner doesn’t want to deal with financing, we propose them to find investors, create a special purpose company, We should be with a little percentage in the special purpose company will find people that want to invest money in the project and the special purpose company will subcontract to Adionics the technology to an EPC constructor the EPC to an operator the operation and so on.

So that’s second model that we are trying to address as well. But the base model is the technology partner and that’s it.

Partnerships and Future Prospects

Antoine Walter: mentioned the technology partner, you are currently, or you have finished building your CL250 in Latin America. you pick someone which will be your partner for all future projects of this kind, or are you fully agnostic? Whoever is able to put a speed and a frame together is able to put your process together.

Gabriel Toffani: Just a word, the CL250, we did run it, in, North France,

now, waiting to go hopefully to San Antonio de los Cobres, but it’s still in a French port. Okay. , we have two CL One is in Germany because we have a partnership with a company called.

Kutek, because they are making the carbonation. I mean, we are not married. We don’t work always together, but you know, the interesting thing is that the mining company in South America can send brines and we do DLE and carbonation at the same place if they want to make the whole process. And then the second CL 15 is moving right now from Atacama to Salta to North Argentina.

That will be installed soon because it’s a faster to move and we do have the place to install it already.

Antoine Walter: Okay. I have a curiosity question here because your pilot is moving from Chile to Argentina. It’s called the lithium triangle, which means there are three parts of the triangle and your technology is super selective so that it doesn’t really bother with everything which is mixed with the lithium or not as much as other technologies would. That has always been the drawbacks of Bolivian brines that they are mixed with a lot of stuff. It’s not the only. reason why Bolivia is not producing, but it’s one of the reasons why Bolivia is not producing. When I’m hearing what your technology does, it sounds to me like you would have probably a very good solution for Bolivia. Is Bolivia somewhere on the map for you? Or do you say, ah, there’s more than just technology at play here. Wait and see.

Gabriel Toffani: in Bolivia, we have for a few years now an agreement with one university. We did work with them on Bolivian brines with excellent results. And in the last,, we are present in the,

Antoine Walter: In the tender.

Gabriel Toffani: the tender of figure, YLB. So we are looking to Bolivia. Of course, we are looking to the three sides of the triangle, and we would like to be present in the three of them, of course.

Antoine Walter: Before I go to the elephant in the room, because you mentioned SQM already a couple of times, I have to give you that. Stupid personal anecdotes. I mentioned that I was chasing you Salta. Salta. I was together with my colleague from Argentina and he just looked you up on Google. And the first thing he saw is that you’re based in Les Ulysses, but on Avenue des Zondes.

And to him, that was like, of course. And I’m wondering, is it a coincidence? Like you picked a building and then it happened to be Avenue des Zondes or Did you really pick it because hey, if you’re targeting the lithium triangle and all the end is you have to be based in avenue design

You know there’s two entrances. The other is, Avenue, , Terre du Feu, though. , we didn’t pay to the major to change the name of the road. , it’s a coincidence, but it’s a nice, uh, coincidence, right? makes a good icebreaker, I guess when you’re discussing

Gabriel Toffani: we will stay here for a long time.

Okay to a bit more of a serious question. you’ve been Raising 27 million from a group of investors whose lead investor was SQM, which means now SQM is a major investor in Ideonics. SQM is for a while looking at ways to increase the yields of their lithium production in Atacama where today they use only evaporation ponds.

Antoine Walter: Are the two linked and you would be very logically going into SQM Futuro and start developing something in Atacama or is it just SQM is interested in cool people? I had salinity solutions on that microphone just two weeks ago and SQM invested in them. Even though it’s not for lithium topics, it’s for water topics.

So how linked are those two elements that they are running a potential DAD project and that they invested in you?

Gabriel Toffani: SQM, was , for us before they invest already a prospect because we were talking to them for a long time. We were expecting to perform tests and so on. So, be honest, don’t have the answer to your question. You know, that the situation in Chile is changing because Esquima has a concession until 2030.

They announced publicly that they are. Dealing with Codelco. are supposed to sign an agreement, but our everyday life is to give the best service as we can to Sremm. I don’t know which are their intentions for the future. And not only with Sremm, right? Because we are commercially working with everybody.

So of course SQM is a shareholder and we are trying to give them.

SQM Funding and Future Plans

Gabriel Toffani: Extra super excellent service and we are trying to do the same with the other companies, of course,

Antoine Walter: is you raised 27 million. What do you want to do with that money?

Gabriel Toffani: there are a few things. First of all, of course, we need to run the company. And we need finance for that today. We are commercializing, just the test, which give us some income, but not enough. maybe you realize that we were two years ago, about 20 people. we are 50 today.

Expanding Commercial Presence

Gabriel Toffani: So that has caused, and then , we want to reinforce our commercial presence.

We have a Very small commercial team. So we are, trying to develop our commercial forces on one side and on the other, Even if we have the fly on X model we need for the brines we are addressing today, we have a lot of research subjects that we want to develop and that costs money.

Innovations in Lithium Extraction Technology

Gabriel Toffani: we are trying to develop more efficient fly on X for our lower or higher concentrations, lower to be competitive, higher to be even more competitive. We are also, addressing the lithium battery recycling subject. We are trying to extend the use of our technology to the hard rock market as well.

And then you can imagine more. So we are going to invest also in, in,research. And last but not least, might need capex to have more, pilots for demonstration. So we might invest the part of that in new pilots. Right

Hard Rock and Battery Recycling

Antoine Walter: You mentioned two things here. One, which I had spotted, which is the battery recycling thing. So I’ll come to that later. Let’s take the other one, which I had not spotted. How do you play into hard rock in the value chain of Spodumene? At what stage can your technology come into play?

Gabriel Toffani: we are talking about a liquid liquid technology, so we are not going to make a rock liquid now. after this deviation, there’s the same in the black mass. You need to make this deviation and then we can go with our technology. So the hard rock will depend how many stages you have, how complex is your process after insidiation.

Antoine Walter: we will have places where we think we can be competitive. this is a kind of end of research subject. We are not ready to industrialize but we will be in the next step. months or years, So that means. Just a wild guess that you’re coming into the value chain of lithium refining. So after lixiviation, that means you would be competing with ion exchange and this kind of technologies, and depending on the complexity and the impurities, which are at that stage, you might be more competitive than an exchange on specific cases.

Gabriel Toffani: Yeah. and we always, have the advantage that we produce very pure, lithium chloride, or maybe in the future lithium sulfate. , which is not today a lot the case in the battery lithium recycling, right? So that will, we hope give us an advantage.

Antoine Walter: Battery recycling is Europe’s bet. I don’t know if anyone really formalized that that way, but again, from my point of view, when you look at the way Europe developed its value chain, the bet is if recycling becomes big enough, then Europe can reduce its dependency on

Gabriel Toffani: Yeah.

Antoine Walter: the other geographies.

Geographical Focus and Market Strategy

Antoine Walter: Is that the wave you intend to ride or do you also target other geographies?

Gabriel Toffani: I cannot say we are geography agnostic because it’s not true. Our focus 99. 9 percent is the lithium triangle and those brines, right? Then we will try to address battery recycling all over right? We don’t have a vocation to be just european so we could do that in the us will be a lot of recycling companies, but of course that will allow us to work in europe as well, but We are not focusing just in european market.

Antoine Walter: 99. 9 percent of your focus is on South America.

Gabriel Toffani: Yes, sir.

Antoine Walter: I closed. A narrative arc last year, when I published my video on the topic, you probably didn’t see it. won’t blame you for that. just to give you a bit of context,

Gabriel Toffani: yeah

Antoine Walter: coming from the East of France. In the East of France, we used to have potash mines. Those potash mines were developed by the same people that later developed the potash mines in Atacama, which ended up being what we know today as both Albemarle and Esquim operations in Atacama. So that’s the link between both of them. It happens that when those mines closed, they kept doing some analyzes of the water inside.

And it turns out there’s quite a lot of lithium in those potash mines, 400 ppm. When I’m hearing that your sweet spot starts north of 250,

Gabriel Toffani: Yes, sir.

Antoine Walter: I would expect that, , I give you a ring and I say, look, I have three cubic meters of that brine and 400.

PPM lithium. Would you be interested or would you tell me, ah, 99. 9 person means we don’t have the bandwidth to take a crazy guy story out of Eastern France.

Gabriel Toffani: let’s explain to your public that in France, people coming from Marseille used to exaggerate. So I’m not coming from Marseille, but it looks like it’s not 99. 9 lithium triangle because we are addressing projects in the US as well. But from brines, right? And you know what? One of the brines we are addressing now is from a potash company.

We already made tests and with excellent results. So we are trying to go farther on that. I cannot tell you much more, but the answer to that client should be, of course, and we did the answer already.

Company Growth and New Offices

Antoine Walter: In terms of company building, when you joined, were there already 20 people or was that prior to the series B?

when I joined two years and something ago, we were something like, 18, I guess. so now you’re opening, an arm in South America,

Gabriel Toffani: Yeah. In Argentina.

Antoine Walter: Argentina. guess it’s probably the first time that Adionix builds another office abroad. So how do you build that? Because there are lots of time zones difference, a lot of thousands of kilometers

Gabriel Toffani: we are going to show technology in real conditions there. So we need to be there. , there’s not two possibilities. So we started, opening a subsidiary in Argentina. We might do the same in Chile. And, we hired to start a manager and now we have six engineers.

I knew the manager from my former life. So that confidence is very important when you are far away. not that difficult. So that’s running very well. We have very good engineers there. They did run the test in Atacama. They are going to run the pilots in North Argentina with local people.

Right. We have two people in Chile, four in Argentina. So

Lithium Market Trends and Challenges

Antoine Walter: I know that one should not obsess over the lithium spot price in China, that it’s just one temperature of the water or whatever we want to call it. It’s not the temperature of the full ocean yet. It is true that it is down. We’re back roughly the same levels than it was in 2017, 2018.

Gabriel Toffani: yeah.

Antoine Walter: When I left Salta last year, so roughly, I guess at the same time that you left Salta, , each regions had 20 products in the development and with the current lithium price, it seems like it’s slowing down. Are you feeling that as well? And does it have implication on your daily business?

Gabriel Toffani: we are feeling the same, some companies, even big companies, officially declare they are slowing down So yes, we do feel that, then we can guess whatever you want is going to go up or not soon or not. I’m not going to make any guess because it’s not my business.

But the world will need lithium in any case. the price we have today. most of the South American brands, we can still make profitable, competitive plants. you can look at that as an opportunity. As I told you, we believe we have a very low CapEx and OPEX.

So we said, maybe these will even be a booster for our technology because There will be a selection  you know, when the lithium was a 90 kilogram, , even if you need to heat the whole brine at 80 degrees, you could pay that. And in two years you got your money back today is much more selective, right?

So maybe that will be a boost for our technology. And I hope it will.

Antoine Walter: That’s my point. That’s why I wanted you to have your opinion. It’s that when the lithium price was stupidly high or incredibly high, depending on how you want to see it. We saw that very low value assets were developed like Lepidolite mines. And also we saw that the high end DLE. We’re not pushed that much, because if the price is so high, what you want to do is produce as fast as possible and push it out to the market because whatever it costs you, if you can sell it, you make money.

And so there was a big revival of all the. Let’s call it, dough style DLE. So the 60, 60s patent from dough what livens is doing in Argentina and what some are doing in China, because that works, that’s proven to work. We know that it can’t be the most efficient, but it works. If now you have to be selective because yeah, you still have to be profitable. You’re not. pushing out lithium in the market to lose money, I would see that as a win for you.

Gabriel Toffani: I think this could be a boost for us.

Future of DLE Technologies

Gabriel Toffani: and then if you ask me, what’s going to happen with the 50 or 60 DLE companies today, I guess in the coming years will be like in a lot of markets, a consolidation, and maybe in a few years you will have, I wouldn’t say three, but maybe 10 and those will be.

Of course, the more performant and the more competitive, and of course, we think we are going to be one of those three or 10, right? because of our technology and of our costs.

Antoine Walter: let me give you a devil’s advocate question here. And then I’ll leave you in peace with that question. Let’s assume that this new generation of DLE makes it. When I had that conversation with Ben Sparrow from Saltworks, he was saying generation one is this dough style, generation two is when you backwash with acid, but it’s still an adsorbent.

And then generation three would be membranes, ion exchange, solvent extraction, now one of these generation three technology makes it big time, let’s say, Lilac makes it big time and Ion Exchange becomes the big thing. Would that be problematic to you? Because you’re not doing Ion Exchange, you’re doing something which is probably in the same waters in terms of CAPEX and OPEX, but if the market is risk averse and one of your incumbent technologies makes it big time, then maybe why take the risk for something which is slightly better, maybe?

I take your case exactly as you are describing, it could be a problem, but I’m not quite sure that’s, , in the real life, what I think is going to happen is that at least one company in each technology are very advanced. And we’ll be in, let’s say, two or three years. Plants running with at least one of each of the existing good processes, including ours.

Gabriel Toffani: And then we will see the reality of who is working and who is not. So I don’t think this will go for a single DLE technology. It will be, as I told you, between three and ten that will develop, and there will be space for those three to, let’s say, three to five.

Go.

Personal Insights and Career Reflections

Antoine Walter: to round off that deep dive, I have a personal question for you because we shortly discussed before starting the recording about our respective pasts, we’ve been working for the same company, not at the same level. I was like the guy just next to the door and you were on the top of the food chain.

Gabriel Toffani: That’s not why I didn’t talk to you in Salta, to make it very clear, right?

Antoine Walter: don’t worry. But to be serious, you’ve had an impressive career amongst DeGremont, Suez, and all those layers. It’s a big leap of faith in 2022 to say, I believe in that ad unit company, which is 18 people by the time you join, that’s going to make it big time. And I’ll go do that. So what drives you to that leap of faith?

Gabriel Toffani: I was only 32 years in the Swiss group, you know, many countries around the world. in one moment I felt it was okay. It was enough. I was not going to be CEO of the group. We were going to be sold to Veolia, which is another subject. I mean, I like a lot to Veolia people, but

so I just said, let’s go to do something different. And I did look to a lot of startups to be honest. And once again, , I don’t know. It was a feat with Adionix, Adionix board, Guillaume, the technology. This looks a bit as water treatment as she knows, or it’s not completely different, but enough.

And once again, after two and a half years, , I’m very happy because all what I’ve been told before coming, it was like that and it’s true. , I am in the. I hope not in the end of my career, but near, right? I’m 65 years old. So, I mean, I think nothing to show to nobody.

And I’m having a lot of fun. , at the end, it has a great team, you know? So It’s a pleasure after all those years working in a big group to be in a startup and trying To help things to get done for what at the end what we want is that the only succeed but Helping the green mobility, which is I think a good subject, right?

So that means that your North star is that in five, 10, or whenever you want to put the big KPI, your way to measure if you were successful or not is the impact you will have on the green mobility.

of course. Yeah. Yeah. Yeah. Yeah.

Antoine Walter: And how do you measure that?

Gabriel Toffani: if there’s a lot of lithium produced in the triangle, but everywhere else in the Very green way that will be the way to measure it. And of course, if adionics is the DLE leader from far, that will help you that. So I hope both things will happen.

Antoine Walter: I said, it was the last question. I lied. I have one more just on this TLE topic, just because I want to wash that off of my head. I had a conversation two weeks ago with Carlos Galli from Lithium Americas at the Global Water Summit. I hope I’m not breaching any secret here. but we were discussing water use and how.

That’s important. And I see that that’s clearly one of the perks of your technology. So I’m thinking, could you also be a combination with evaporation ponds in places which already have evaporation ponds anyways, that they would be just increasing their efficiency by bolting on LDLE technology, which happens to not consume too much water, which is sometimes a drawback of DLE.

Gabriel Toffani: Yeah, of course. can do that. And we are studying a few places where we could pre concentrate. we developed with existing bones and then just get the concentrate brine, which I told you, we are much more efficient. So the answer is yes, of course.

Antoine Walter: Well, Gabriel, it’s been a pleasure to spend that deep dive with you. Thanks a lot for the openness.

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Rapid fire questions:

Antoine Walter: my first one is what is the toughest challenge in your opinion for a water tech startup?

Gabriel Toffani: it’s definitely to hire the right people. , that’s a completely important thing.

Antoine Walter: What would be your best single piece of advice for the founders and managers of the about 1, 000 early stage water startups?

Gabriel Toffani: I tell you, I’m a very humble person. I don’t think I can give any, advice, but, I said hire the right people and I think when you are the CEO you just Make that people happy and the company is going to work And then of course from the CEO place, I think you need two things Hear your clients, hear your board, make your people happy, and that’s enough.

So you see, you can work three, four hours a day, do that, and that’s fine.

Antoine Walter: What’s the drop of knowledge you wish more investors knew about the water sector?

 That’s the real future of the lithium production from brines is the DLE, the future, not the evaporation. I’ll take a very short sidetrack here. I have sometimes the impression when discussing with investors that they are maybe a bit too convinced about that. And what I mean about that is that they expect DLE to be so much of a solution that almost the entire world produced lithium out of DLE. Within two years, which is twice wrong, as you know, I mean, I’m not teaching anything to you, but it’s wrong because spodumene and evaporation bonds will not go away or not, at least not that fast.

And second, within two years, nothing’s going to happen. And the downside of that is that when they expect something to drastically change that fast, Then when they realize that it’s not changing that fast, they’re disappointed. And then they can start disbelieving everything, even though it’s just a natural course of events.

So my two cents, , what was your most unexpected partnership and what did it bring you?

Gabriel Toffani: there are many, but, talking to lawyers, a few days ago, and it was, they had a great commercial idea. So that makes me think you need, any kind of people can have great ideas. So treat everybody the same and you will get great ideas for everybody.

Antoine Walter: That’s a cool one. Super short, profitability or growth?

Gabriel Toffani: Can I take both? No.

Antoine Walter: You have to pick

Gabriel Toffani: So let’s say profitability.

Antoine Walter: what is the next profile you’ll hire? And I’ll use that question to mention that I saw that you have six job offers on your website. So probably if someone listening to that wants to reach out,

Gabriel Toffani: , we are having a lot of things to do. We are going to hire a project manager officer to take care of all that. So I think It’s a very important and passionate, place to work

Antoine Walter: looking for someone in France or in Argentina.

Gabriel Toffani: in France.

Antoine Walter: When you hire that project manager or someone else, are you looking for sector experience, like lithium sector experience or startup experience?

Gabriel Toffani: Can I add a third possibility or not?

Antoine Walter: Yeah, sure.

I should say now, if I need to choose, I should maybe choose sector experience, but most attitude, you know, it’s a kind of, positive, solving, happy and, smiling. That’s a very important. And then the rest, but sector experience, I guess. It needs to fit your existing culture. Makes sense. opening new markets or doubling down on the current ones.

Gabriel Toffani: All your questions, I want to say both, but okay, say I find very funny opening new markets, but let’s take that one, but we are doubling down on bright as well. Don’t worry.

Antoine Walter: What’s that tool nobody speaks about, but you couldn’t live without?

Gabriel Toffani: I still run marathons and make Iron Man, so that’s my tool to be okay every morning.

Antoine Walter: Super cool. I never got that one. So.

Gabriel Toffani: I don’t know anything about real tools, so forget it. I’m not a good example.

Antoine Walter: What’s the single piece of insight, your ideal customer profile, which if I get right, is a mining company needs to hear right now,

Gabriel Toffani: Okay, we already said that we have the best process at the best price. and we are, people in which you can trust.

Antoine Walter: what are you desperately needing and you want to raise an open call for right now,

I don’t need anything desperate. Thank God.Well, Gabriel, it’s been a pleasure. Thanks a lot for the openness in answering all those

questions. And I’m looking forward to that sequel in six months.

Gabriel Toffani: Okay. Thanks for having me.

Antoine Walter: Thank you.

Gabriel Toffani: Next time Insalta call me Gabriel and I will turn around and talk to you.

Antoine Walter: Sounds good.

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