The rush to get Canadian lithium mines online

At the centre of North America’s fledgling battery supply chain — and at the positive end of essentially every electric-vehicle battery to be built for the foreseeable future — is lithium.

Canada produces negligible quantities today. But as the auto sector builds an end-to-end battery supply chain, and as legislators in the United States freeze out many overseas suppliers, mining experts say Canada has the lithium reserves and regulatory climate to meet at least part of North America’s burgeoning demand.

Canada is the only jurisdiction in North America with the mining know-how to get much-needed projects online quickly enough, said Phil Gross, CEO of Toronto-headquartered Snow Lake Lithium Ltd.

“Canada has the resources. Canada, most importantly, has the comprehension, which the United States just doesn’t have. Even the projects that we’re seeing in the United States, they’re getting stuck on the drawing board.”

New mines and processing plants cannot come online soon enough, he said. If governments and industry cannot come together to build an integrated supply chain for lithium, “there’s an existential threat to the entire North American automobile industry,” Gross said.

But pitfalls in permitting, limited investment capital and risks tied to scaling up vital new technologies persist.

Establishing a self-sustaining lithium industry in North America will be an uphill climb, said Kwasi Ampofo, a mining and metals analyst at BloombergNEF.

Even if the United States “turned the ship” on permitting today, production remains years away, Ampofo said.

But the slow process in the United States “presents an opportunity” for Canada, Ampofo said, as Canadian lithium bundled into batteries would help vehicles qualify for the updated US $7,500 EV tax credit recently enacted by the U.S. government.

Capital for lithium projects in North America has been hard to come by so far, he said. But the new U.S. legislation should “guarantee” investors that metal from local mines will find buyers, encouraging them to move ahead with development.

Lofty prices are another factor. According to Bloomberg, the price of lithium carbonate — one popular form used for lithium-ion batteries — reached a new high in November, having more than doubled since the beginning of the year.

‘WE COULD BE IN PRODUCTION IN 2035’

Snow Lake Lithium is among the small Canadian mining companies that could take advantage of a warmer investment climate, assuming regulators approve its Thompson Bros. hard-rock lithium project in central Manitoba. The company aims to enter the permitting phase on the 55,000-acre (22,000 hectare) site next year, Gross said.

“If the permitting gods smile upon us, we could be in production in 2025.”

This speedy turnaround “can be done,” given that the regulatory regimes in Canada and Manitoba are well-acquainted with mining, Gross said. But he acknowledged the process is not simple.

Nearly two dozen other Canadian companies are concurrently pushing lithium mining projects through exploration and development, according to Natural Resources Canada (NRCan). The majority are in Quebec and Ontario.

“Multiple advanced projects targeting lithium from both hard rock and unconventional sources are expected to come into operation in the next five years,” Anthony Ertl, a spokesman for NRCan, wrote in an email to Automotive News Canada.

Mines in Quebec could begin commercial production in early 2023, Ertl said, followed by a pair of complementary lithium refineries to process the material into battery-grade lithium hydroxide by 2027.

NRCan estimates that Quebec could be producing 8.5 per cent of the lithium needed for North America’s EV battery market by 2027.

“Other advanced projects are expected to reach commercial production over the next decade, which together could increase Canadian lithium output to about 27 per cent of North American demand, nine per cent of global mine supply and eight per cent of global demand for lithium use in EV batteries,” Ertl said.

MINES AND BRINE

A report in spring from the International Energy Agency forecast that up to 50 new lithium mines will be required worldwide by 2030. Because lithium can be sourced from different types of deposits — brine, hard rock and clay — these mines are likely to take dramatically different forms.

Hard-rock deposits in Quebec and Ontario, as well as at Snow Lake Lithium’s site in Manitoba, will generally require conventional, open-pit mines. or what Gross describes as “old-school mining.”

But in Alberta, the lithium “mines” could operate more like drilling rigs.

One company, Calgary-based E3 Lithium, is scaling up technology that quickly extracts lithium from brine trapped in underground formations.

“We’re not oil and gas, but we operate like it,” said E3 CEO Chris Doornbos. “We have a well; we pump the fluid from the aquifer; we bring it to a facility where we make lithium.”

E3 uses what is known as an ion exchange process to pull lithium from a brine solution rich in lithium salts. Carried out as part of a closed-loop system that requires no fresh water, the brine from the aquifer is pumped back underground after the lithium is captured.

‘NEW-TECHNOLOGY RISK’

E3’s process — one example in a basket of technologies referred to as direct lithium extraction (DLE) — takes less than an hour to pull lithium from brine. This compares to the traditional evaporation method used in the salars, or salts flats, of Argentina and Chile, which can take two years to yield lithium, Doornbos said.

His company’s ion exchange method also uses minimal land compared to the evaporation process in South America and to more invasive hard-rock mines, he said.

But as with other DLE technologies, E3’s process has not been proved on a large scale.

“Any new technology has new-technology risk,” Doornbos said, “and we’ve done our best to de-risk the research and development side of it, but we still have to scale it up and demonstrate that it works commercially.”

E3 will pilot its technology next year, drawing brine from the Leduc Formation in central Alberta with support from partner Imperial Oil Ltd.

As the company advances its technology, the Alberta government is supporting the emerging opportunity by streamlining regulations. In December 2021, the province passed a bill tucking oversight of oilfield lithium brine developments under the Alberta Energy Regulator. That is expected to create more certainty on project approval timelines, Doornbos said.

At the federal level, Ottawa is assessing similar steps for conventional mines as it maps out its $3.8-billion critical-minerals strategy. The strategy aims to leverage local resources to expand Canada's presence across the mineral value chain, from exploration through to processing and manufacturing.

Mining regulations typically fall under provincial jurisdiction, but Ottawa has a stake in some environmental approval processes.

With fresh funding for mining and processing projects, policy assistance from all levels of government and private investment in upcoming projects, NRCan said Canada “will have a strong battery supply chain by 2025.”