Mining company set to invest $176M in new concentrator
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THE owners of the only producing lithium mine in the country are preparing to invest $176 million to build a new concentrator in Manitoba, which may be a precursor to an even larger investment in the province.
Tantalum Mining Corp. of Canada Ltd., which owns the lithium Tanco Mine near Lac du Bonnet, has already begun preliminary work on the site and is in discussions with neighbouring Sagkeeng First Nation.
Consultants are preparing the information needed to apply for permits.
The new processor will be able to handle 3,000 tonnes of ore per day as opposed to its current capacity of 500 tonnes per day.
Bill Curry, vice-president of North American business for Tantalum, said the additional capacity that will become available will initially be deployed to reprocess the mine’s tailings to extract lithium and cesium.
“We currently have over 60 years worth of tailings,” he said. “We know there is recoverable amounts of lithium and cesium in the out tailings.”
The mine was acquired by Sinomine Resources Group Co., Ltd., a Chinese-owned company listed on the Hong Kong stock exchange, in 2019.
Last November, the federal government announced a new policy that it would not allow state-owned enterprises to own critical minerals in Canada. Lithium is one such critical mineral.
While the parent company has approved the capital expense, Curry said he understands he will still need to negotiate his way around the federal government’s policy.
The federal government has already ordered Sinomine to sell its five per cent stake in Vancouver-based Power Metals.
“We understand it is just one additional hoop we need to go through to be able to build this plant,” he said. “But we want to build it. It is a good idea.’
For many years it was concentrated on mining tantalum, but with the increased demand for lithium — used in batteries that are now in desperate demand for the electric vehicle market — the company recently refocused its efforts on lithium production at the Tanco mine.
But even with its increased focus on lithium and the work it can do on its tailings, the additional capacity will mean Tanco will have to somehow find additional tonnage to satisfy the additional capacity.
Curry said one way to do that will be to find outsourced feed.
The company already has a memorandum of understanding with Grid Metals Corp., a lithium exploration company that has been aggressively drilling a property that’s only about 35 kilometres away from Tanco’s site.
“Grid is getting to the point where they are going to want to do a bulk sample,” Curry said. “And lithium mines and exploration operations in Ontario will want to talk to us for multiple reasons. We have the technical expertise.”
Robin Dunbar, CEO of Toronto-based Grid Metals, said, “We have been in discussions with them about supplying ore to their operation. If they have more capacity that would probably increase the chances of that happening, so that is probably good.”
He said Grid is in the process of applying for an advanced exploration permit, which they need to do to get a bulk sample done.
“Before that we will do some testing with Tanco on a much smaller scale,” he said.
Tanco and Sinomine are also thinking about the possibility of investing in a much larger lithium hydroxide plant, which would process the lithium into a state that the battery manufacturers need.
That would require about a $1-billion investment.
Snow Lake Lithium, a lithium exploration company with a promising lithium property near Snow Lake, has signed a memorandum of understanding with LG Energy Solutions, a large Korean battery manufacturer, to investigate the possibility of building a lithium hydroxide plant in Manitoba.
But Snow Lake Lithium is now under new management and that plan may no longer be in place.
Dale Schultz, the company’s vice-president of resource development and a member of the board, said that company is now talking to both Tanco and LG.
Regardless of how technically appropriate a new processing plant at Tanco’s mine may be, the company is going to have to navigate its way through national security concerns.
An official with the provincial government, who spoke on condition that his name not be used, said the province takes the federal government’s concerns about state-owned entities owning critical minerals in Canada.
“There is a lot of concern around this,” he said. “We always welcome the foreign direct investment, but out of national interest this is a concern.”
He also said there are other proponents looking at developing a lithium hydroxide plant in the province.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.