An open pit at a lithium mine outside La Corne, Quebec, Aug. 30, 2022.BRENDAN GEORGE KO/The New York Times News Service
Sayona Mining Ltd. SYAXF and Piedmont Lithium Inc. PLL-Q have restarted commercial output of lithium in Quebec, a small step forward in Canada’s ambitions to become a player in the production of a key critical mineral.
The hard rock project, called North American Lithium, is located 60 kilometres north of the Val d’Or mining region in western Quebec, and was in disarray as recently as three years ago. Previous operators of the lithium project spent about $400-million to put a mine into production about a decade ago, before running into numerous operational problems, and a crashing commodity price, which eventually resulted in a creditor protection filing.
Brisbane-based Sayona and North Carolina-based Piedmont acquired the mine out of the Companies’ Creditors Arrangement Act (CCAA) in 2021, and have since jointly invested $100-million into the project to allow a restart.
North American Lithium plans to ramp up its production over the next six months or so, and by the third quarter expects to be shipping lithium to battery makers and car makers, including Tesla Inc. TSLA-Q, and South Korea’s LG Chem Ltd.
North American Lithium is starting up its production at a time when lithium prices have swooned about 40 per cent from last year’s all-time highs. Despite the volatility in the commodity, Keith Phillips, the chief executive officer of Piedmont, which owns 25 per cent of the project, is confident the mine can make lots of money. And because the capital has already been spent, North American Lithium isn’t subject to inflation that could bedevil the projects of its competitors.
“Lots of projects have to get built, and that costs money and takes time. Having that all done already is a big advantage for us,” he said.
“Right now, the operation should be very profitable.”
Sayona and Piedmont are also studying the possible construction of a chemical plant that would refine lithium concentrate produced at the mine into battery grade lithium. A final decision will depend on the outcome of an engineering study looking at its feasibility.
Just this week, the federal government in its budget, reiterated the need for Canada to limit its economic dependence on countries deemed hostile to Canada’s interests, including China and Russia, and underlined the importance of boosting production of key critical minerals such as lithium, cobalt, nickel and graphite.
China dominates the lithium industry globally with a roughly 60-per-cent share in the highly profitable refining sector, and it is the biggest producer of EV batteries.
Despite a surge in demand for lithium to supply batteries for electric-car production in North America, there is currently very little North American production. The United States has only one small lithium mine in operation, Silver Peak in Nevada, operated by Albemarle. The other Canadian lithium mine in operation, Tanco in Manitoba, is owned by a Chinese company.
While Quebec’s historical forays into the lithium market have not worked out, at least two other lithium companies have ambitions to join Sayona and Piedmont.
Earlier this year, privately held Galaxy Lithium, owned by Australian lithium miner Allkem Ltd., received federal approval to build a lithium mine in the province.
Meantime, privately held Nemaska Lithium, owned by U.S. chemical company Livent Corp. LTHM-N and the Quebec government, hopes to have a lithium mine and associated chemical plant in production in Quebec in 2025. An earlier iteration of Nemaska, in which the Quebec government also invested, ended in financial ruin with a creditor protection filing in 2019.
Another Canadian lithium company, Lithium Americas Corp. LAC-T, is building a new lithium mine in Nevada.