Golden opportunity

Hey there, time traveller!
This article was published 12/04/2022 (1456 days ago), so information in it may no longer be current.

Last week, the federal government committed $3.8 billion to the mining sector for the development of critical minerals like lithium.

The next day Elon Musk, the richest man in the world, linked to a tweet showing lithium prices rising 17-fold in the last 10 years, writing, “Tesla might actually have to get into the mining and refining (of lithium) directly at scale, unless costs improve.”

And on Monday, Snow Lake Resources (also called Snow Lake Lithium) announced that it was in discussion to “assess the proposed creation of a lithium hydroxide plant in southern Manitoba.”

Lithium is a major element of lithium-ion batteries used in electric vehicles (EVs).

As the war in Ukraine has jacked up gas prices more than 25 per cent in one month, the world has focused its attention more acutely on electric vehicles.

That has also heightened the concern about the fact there is virtually no production of lithium and absolutely no lithium processing facilities in North America. (There is some lithium production starting in Quebec and an industry source said the Tanco mine near Lac du Bonnet, which mines rare metals like cesium, may now be exporting some lithium concentrate to China. The mine is owned by a Chinese company.)

There are four or five lithium exploration projects currently ongoing in Manitoba and activity is picking up around those projects focused around Snow Lake in Northern Manitoba and the Bissett area about 180 kilometres northeast of Winnipeg.

Snow Lake Resources made a splash late last year raising $24 million in an IPO and listing on the Nasdaq exchange with the stock shooting up to close to $20 before quickly settling back to around the $6 range.

Between them, Snow Lake Resources, New Age Metals and Grid Metals Corp. will be spending more than $15 million this year drilling their properties to prove up mineable quantities of lithium.

But meanwhile, Snow Lake Resources CEO Philip Gross is already working on the next step in the process — finding joint venture partners to build a lithium processing facility… in Winnipeg.

Between a mine and a processing facility it could mean an investment of well over $1 billion.

“I have become the greatest ambassador for Manitoba,” said Gross, a native New Yorker.

“It has everything, hydroelectric power, the perfect infrastructure in terms of rail, communities who understand mining and the technical expertise with a 100-year legacy of mining,” he said.

Gross has been talking with the Manitoba government about the project and Premier Heather Stefanson provided a quote to the company’s Monday press release saying, “Manitoba has the opportunity to be at the vanguard of the global initiative of achieving a carbon neutral economy. Snow Lake Lithium’s vision for developing a green ecosystem in our province will provide Manitoba with the platform for creating jobs and value with a focus on the future.”

Discussions are already underway with regards to scoping out a potential site in CentrePort. Late last month, when asked what kind of companies may become tenants of the CentrePort Rail Park, Ken Mariash, the CEO of Focus Equities, the company that was recently announced as the developer of the rail park, mentioned the possibility of “lithium processing and things like that.”

While it is not typical for mineral exploration companies to be talking out loud about developing capital intensive processing facilities before they have even built a mine to extract the minerals, Gross said that in a perfect world that’s true.

“But the way things are today the ability to take the concentrated lithium you produce at the mine and to actually bring it to market does not exist because you are missing the processing stage,” he said.

Australia, Chile, Argentina and China mine most of the lithium, but various reports indicate that China controls the vast majority of its processing.

Gross said that the EV industry in North America would probably not be sustainable if it had to import all its processed lithium for batteries from China.

“You need the infrastructure,” he said, “You can’t wait around for it to somehow materialize.”

Gross said he has already started talking to companies like Ford, GM, LG and Panasonic about a processing plant. The idea is that it would do the processing for other lithium producers, not just Snow Lake.

Robin Dunbar, the CEO of Grid Metals Corp whose lithium exploration site is near the Tanco mine, said. “Those kinds of plants are going to be located around transportation hubs. I think it would make a ton of sense to have one of these in Winnipeg because there are quite a bit of lithium in Manitoba. It is all over the place.”

Diane Gray, the CEO of CentrePort said her understanding is that a lithium processing facility is quite complex and would need several years to plan and construct.

“There is the downstream future opportunities associated with the processed lithium,” she said. “With Snow Lake signalling its intention to the marketplace… it could allow us to potentially attract (battery) manufacturing that could use that input.”

martin.cash@freepress.mb.ca