To drive the electric-car revolution, manufacturers are going to need a lot more lithium. And a startup wants to be a cheaper and more eco-friendly supplier.

Lithium is used in the production of lithium ion batteries—the kind used in cell phones and cameras, but also in the all-electric Tesla Roadster, Nissan Leaf, and other fully electric cars.

Annual demand for lithium worldwide is about 22,000 tons, but electric-car batteries will increase demand by a third annually, starting this year, according to Cormark Securities Inc., which tracks the lithium market. Little is produced in the United States.

Pleasanton, California-based Simbol Mining Corp. has developed a process to extract lithium from the waste brines of geothermal power plants. Backers say it will produce lithium more cheaply and with a smaller carbon footprint than any other producer out there.

“We create value out of existing geothermal, and we can fuel other technology through the production of these materials,” said CEO Luka Erceg. “And we support the clean-energy industry in a way that’s sustainable in its production as well.”

Simbol was founded by senior scientists at Lawrence Livermore National Laboratory, who licensed a mineral production technology from the lab and developed new processes to extract lithium. It raised $6.7 million from Mohr Davidow Ventures and Firelake Capital in 2008 and had raised $1.4 million of a $5 million round as of December 2009.

The company says it is near closing its second round of funding. It also was awarded a $3 million grant from a U.S. Department of Energy program funded by the federal government’s stimulus act. Simbol employs 16 people, all scientists.

Geothermal plants pump water into the earth, where it is heated up and then forced back to the surface to turn turbines and produce energy. The returning water or steam brings with it a salty brine that can be rich in metals. Typically, geothermal wells pump that brine back underground, but first Simbol will extract the valuable lithium and other metals. Simbol leased space in Alameda, California, to test its process and is now moving its equipment to the Salton Sea in Southern California’s Imperial Valley. An investor says the company has an agreement with CalEnergy Operating Corp. to test its lithium extraction at four geothermal plants there.

“One geothermal plant can produce 16,000 tons per year of lithium carbonate,” said Erceg. That’s about the capacity of the world’s third-largest producer, he said.

Simbol’s pilot facility can produce 1 ton of lithium carbonate per month—enough for about 100 electric vehicles. But Simbol’s commercial plant will be able to produce 40 tons each day, Erceg said

“We’re not digging holes, we’re not earth scraping,” Erceg said. “Really what we do is source mining.”

Simbol can use its technology to extract a lot of different things, including zinc, manganese, and silver, from the brines of geothermal plants, and it could sell the lithium it extracts into many different markets. “But our focus and reason for being is electric cars,” Erceg said.

Investor Josh Green said, unlike solar and biofuels startups with large upfront capital expenses, Simbol only needs about $60 million to start producing revenue from its first plant, which can be expanded gradually.

“The plant itself is modular,” said Green, a partner at Mohr Davidow Ventures. “You clip on those smaller plants and have your capital allocated over time rather than having to incur it all in one big shot.”