General Motors said Tuesday its venture capital arm will lead a $50 million financing round for EnergyX, a Texas-based startup developing a more efficient method to extract and process lithium from salt flats.

Lithium is a critical component in batteries for electric vehicles. Under the deal, GM will also help develop EnergyX’s technology and will have first right of refusal to buy lithium from any projects developed by the startup.

related investing news

EnergyX demonstrated its technology with a pilot plant in South America’s “Lithium Triangle,” an area of salt flats covering parts of Argentina, Bolivia and Chile that contains over half of the world’s known lithium reserves.

Currently, miners in the area extract lithium by pumping water underground to flush out the mineral, then allowing the resulting brine to evaporate in a series of ponds. The process is relatively cheap, but it only recovers 30% to 40% of the total lithium — while using huge amounts of water and land.

EnergyX’s pilot plant, which opened last year, has demonstrated that its technology can recover 90% or more of the lithium in brine while using much less energy, water and land than existing processes.

EnergyX plans to use the new funding to build five larger demonstration plants in North America and South America.

For GM, a key priority is to unlock a North American supply of lithium, which isn’t cost-competitive with global supplies using current extraction methods. The auto giant believes that EnergyX’s technology could reduce costs enough to make North American lithium mining viable, while minimizing the environmental impact of extracting the mineral.

GM will report its first-quarter results before U.S. markets open April 25.