From Waste to Watts: Canada’s New Lithium Frontier

CANDLE Lithium's April pilot recovered lithium from natural gas produced water, redefining Canada's DLE feedstock landscape

22 May 2026

CANDLE Lithium, an engineering firm based in Edmonton, has recovered the battery metal from low-concentration wastewater at an active natural gas site in western Canada. The ten-day field trial, completed in April, marks the first time direct lithium extraction technology has been proven at scale on this specific type of oilfield brine in the country.

The pilot processed thousands of litres of water at a rate of 200 litres per hour. According to company data, the system achieved a lithium recovery efficiency of more than 95 per cent in continuous operation, matching laboratory benchmarks despite low initial mineral concentrations.

Oil and gas operations across the region produce vast quantities of water as a byproduct. Managing this water has historically been a significant operational expense for energy companies, which typically pay to inject the fluid back underground. The new extraction method integrates into existing water-treatment facilities, potentially converting a disposal liability into a commercial resource without requiring fresh infrastructure.

The development comes as federal and provincial governments face pressure to establish domestic supply chains for battery materials. While Ottawa has committed billions of dollars to large-scale, greenfield brine projects, most of these developments remain several years away from commercial production.

"We are moving toward a commercial demonstration plant," said Salman Safari, president and chief executive of CANDLE Lithium. He added that the company is now prioritising partnerships with industrial operators to integrate the technology into regional water management systems.

Evaluating the technology across different locations remains the next phase, as brine chemistry varies widely by site. This variability complicates project economics and makes standardisation difficult for early-stage infrastructure.

Regulatory challenges also remain. Provincial frameworks governing mineral rights and environmental compliance for lithium extraction from oilfield wastewater are still incomplete, creating policy uncertainty for developers.

Western Canada's broader lithium sector faces steep competition from established extraction operations in the US. However, utilizing existing fossil fuel infrastructure could shorten project development timelines if regional regulators clarify the legal framework for production.