But the acquisition offer, reported on Wednesday by the local newspaper, The Desert Sun, fell through. The report, based partly on an offer letter from Musk to Simbol’s then CEO John Burba, suggests that at least one reason was that the now-defunct Simbol, a venture capital-backed startup, wanted a much higher valuation.

Tesla (TSLA) wanted the technology, expertise, and personnel at Simbol to help the electric car maker potentially tap into new alternative, and more environmentally-friendly sources of lithium. Lithium is a key ingredient in the batteries Tesla buys and plans to produce at its massive battery factory, called the Gigafactory, now under construction outside of Reno, Nev.

That Musk took a serious look at buying Simbol shows just how interested Tesla is in turning to new, unorthodox, sources of lithium, and potentially even vertically incorporating these technologies into its battery manufacturing process. In recent months Tesla has also announced early stage supply agreements with lithium extraction operations in Nevada (Pure Energy Minerals) and in Mexico (Bacanora Minerals and Rare Earth Minerals)

For more on how Tesla is taking a risk on lithium mining watch our video.

Most of the world’s lithium is produced by a handful of global conglomerates using huge football field-sized evaporation ponds in countries like Argentina and Chile. Because the lithium mining industry is dominated by just a few huge companies, supplies can be difficult to procure and can be subject to supplier whims. Lithium extraction operations traditionally also require lots of water and land.

In recent years, the price of lithium has been rising as the demand grows for lithium batteries in cell phones, electronic gadgets, and increasingly electric cars. By 2020 the global market for lithium-ion batteries could jump to about $40 billion from $24 billion last year, according to Citi Research.

A few upstarts, like the formerly operating Simbol, or Canadian mining startup Pure Energy Minerals, see a big opportunity in “lithium 2.0.” These companies have worked on new tech methods, or sought new untapped lithium sources, like central Nevada, just a few hours drive from Tesla’s Gigafactory.

Tesla appears willing to take a low risk chance on these types of promising early stage, but highly risky lithium companies that could offer access to alternative supplies or alternative means of extraction.

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Every startup failure story has many versions, and Simbol’s story is no different. The Desert Sun says that the company was never able to secure the much-needed hundreds of millions of dollars in funding to build a much larger lithium extraction plant. The company has also been sued for financial wrong-doing.

The report says that Simbol’s board was looking for a bid from Tesla of closer to $1.6 billion. The company’s investment bank, Jefferies, had come up with a $2.5 billion valuation. Supposedly, Musk quickly walked away from the negotiations because of the high price.

I visited Simbol’s small lithium extraction plant near the Salton Sea in September of 2014, a couple months before the Tesla offer. The plant had extracted a few hundred tons of lithium product from a mixture of hot water and mineral deposits that was pumped to the surface by a neighboring geothermal power plant. Geothermal power plants use underground hot water to produce energy.

Geothermal plants were also one of Simbol’s key claims to environmental sustainability. The company said it could suck out the lithium and other valuable minerals from geothermal power waste water and send the water back to the plant to reuse. Simbol plants could be built alongside geothermal plants, which could provide carbon emissions-free power to cities.

A few months before my visit to Simbol’s site, Tesla executives had reportedly visited the facility, and there were even rumors that Tesla was considering building the Gigafactory in the Imperial Valley partly to be close to the abundant underground lithium in the region. However the technology could have been valuable for use in Nevada as well, where there are also large amounts of lithium brine and a number of geothermal power plants.

As I reported in September 2014, at the time Simbol was in the process of “trudging through that infamous ‘valley of death’ — the space between proving that a technology initially works and building it out to a commercial scale.” By January 2015, Simbol had laid off much of its staff. Simbol was backed by Mohr Davidow (MDV), Firelake Capital and Japanese industrial giant Itochu.

It will be interesting to see just how innovative Tesla can be when it comes to procuring lithium for its batteries. The company is trying to disrupt both the auto industry, the energy industry, and the battery industry. Will the global lithium markets be next?