There’s money to be made in Silver Peak’s lithium

Tesla Motors isn’t the only big company positioned to profit from the creation of an enormous lithium battery factory in Storey County. Rockwood Holdings figures to hit the mother lode, too.

But while Tesla and its high-profile CEO Elon Musk have made all the headlines following the announcement that Nevada would be home to the the company’s $5 billion battery factory in exchange for tax abatements and infrastructure improvements worth as much as $1.3 billion, Rockwood Holdings of Princeton, N.J., has been content to remain in the background.

That can’t last forever. If Tesla’s battery factory is to be successful, and Nevada’s much-criticized roll of the dice on the company’s future is to be realized, then Rockwood’s lithium carbonate recovery project at Silver Peak — the only one of its kind in the countryand a substantial reason for the move to the Silver State — will play an essential role in the process.

Tesla and Rockwood have something more in common than lithium. They both have benefited from the work of Senate Majority Leader Harry Reid, who this past week snapped his suspenders over the Tesla deal and accepted some of the credit for its arrival.

In a Senate speech, Reid said the arrival of the Tesla factory “is good news for Nevada, but it did not happen by accident. It is the direct result of public-private partnerships and smart federal and state policies. … I have worked here in the Senate to promote legislation that encourages investment in clean energy and transportation innovation at all levels.”

He certainly has.

Tesla several years ago received nearly $500 million in government loan guarantees to build its California electric car factory and repaid the money early. Although Rockwood received a relatively small sum by Tesla’s measure, it wasn’t chump change.

It might be argued that Reid had an even more integral role in ensuring the future of Rockwood’s Silver Peak lithium project, which is in keeping with his longstanding — and at times politically volatile — obsession with expanding renewable energy resources.

Back in July 2010 Reid helped secure $28.4 million in Recovery Act funding to help finance a geothermal power plant that was intended to make the lithium recovery operation self-sufficient. The money was secured through a Department of Energy grant designed for the development of advanced batteries.

Four years later, the lithium recovery facility is about to have a major market just a couple hundred miles away in Storey County.

Reid crowed about the grant in 2010 at a time when chances were good not many people fully understood the potential of expanding lithium production capability in an obscure spot in central Nevada.

“This is great news for the people of Silver Peak and Esmeralda County,” said Reid, not dwelling on the fact there are darn few people living in either Silver Peak or Esmeralda County. This deal appeared to have been cut for a mining company with an out-of-state headquarters, not as a gift to a tiny rural community with a few dozen residents.

“The expansion of this project further demonstrates Nevada’s commitment to renewable energy production and alternative power through advanced batteries,” Reid continued at a time when the demand for such things wasn’t exactly raising any roofs at car companies. “This development is especially important for rural communities where mining is a major employer.”

The $28.4 million grant would help complete a power plant that would mean an additional 50 jobs at the lithium project, Reid said. Given that expense, let’s hope they were really good jobs.

At the time of the announcement, Esmeralda County Commissioner Nancy Boland applauded the grant and portrayed Silver Peak as a community on the edge of ceasing to exist due to impending layoffs.

“They felt hopeless and doomed to extinction,” she said of the residents in a press release. An attempt to interview Boland for this column was unsuccessful.

Four years later, Silver Peak isn’t exactly booming. But what jobs are there appear secure now that the big battery factory will be built.

Tesla and Rockwood are proving that there’s money to be made in lithium at Silver Peak, but those who can maneuver through the hills of government will also find the digging most profitable.

John L. Smith’s column appears Sunday, Tuesday, Wednesday, Thursday and Friday. Email him at Smith@reviewjournal.com or call 702-383-0295. Follow him on Twitter @jlnevadasmith.