Western Lithium starts work on Fernley clay facility

Western Lithium of Reno is moving closer to commercial production of an organic clay for the drilling industry with the selection of a contractor to construct a milling facility in Fernley.

Phoenix Industrial of Vancouver has begun work modifying and retrofitting three buildings Western Lithium purchased in Lyon County in late 2013. The buildings occupy roughly 60,000 square feet on the 5.5-acre site. Western Lithium Chief Executive Officer Jay Chmelauskas expects the plant to be ready for production of the company’s hectatone organoclay this summer.

The clay, which will be mined from Western Lithium’s property near Orovada and purchased from other sources in the state, is targeted for use in directional drilling and hydraulic fracturing. It provides lubrication and maintains well pressure during high-pressure, high-temperature drilling processes. Near-term markets are in the United States, though Chmelauskas sees larger opportunity in international markets.

“We are under way,” he says. “We have got a target to get the plant ready for the summer with a schedule backed by a construction contractor. They are doing the foundation work and upgrading the buildings in Fernley. They will start to put the plant together, and the yard is filling up with equipment.”

Western Lithium has purchased a wide range of specialized equipment, including mixers from North Carolina, dryers from Missouri, and steelworks and equipment instrumentation from a host of different suppliers. Precision Systems Engineering of Salt Lake City designed the facility in 2013.

Here’s how it will work: A contract miner will haul clay from Western Lithium’s mine site in Humboldt County down Interstate 80 to Fernley, where it will be mixed with special additives that change the clay’s characteristics so it can be used in oil-based drilling operations. It’s then dried and ground to a powder and sold in 50-pound bags and one-ton sacks.

Chmelauskas chose Fernley to house the production facility because of its proximity to Interstate 80 and a Union Pacific railhead, as well as for its available workforce. Western Lithium expects to hire as many as 12 people between Reno, Fernley and Winnemucca depending on how many shifts the plant runs and how quickly the operation ramps up to full speed.

“We are elated about going into production after several years of engineering and design,” Chmelauskas says. “It can be a hard road to get any project to the development stage, and we have managed to do that with our hectatone business. We have now attached ourselves as an energy-service provider to one of largest and growing industries in the world.”