About 350 miles northwest of Montreal, amid a vast pine forest, lies a deep mining pit with speckled stone walls. The bunker has changed hands many times and gone bankrupt, but now it could help define the future of electric cars.
Mines contain lithium, an indispensable component of electric car batteries, which is in short supply. If it opens as planned early next year, it will be the second metal source in North America, offering hope that the raw materials needed can be extracted and refined near auto plants. of Canada, the United States, and Mexico, consistent with the policies of the Biden administration. aimed at breaking China’s dominance in the battery supply chain.
Having more mines would also help curb the price of lithium, which has increased fivefold since mid-2021, pushing the cost of electric vehicles so high that they out of reach of many drivers. The average new electric car in the United States costs about $66,000, just a few thousand dollars less than the median household income last year.
But the La Corne offshore mine, run by Sayona Mining, an Australian company, also presents many hurdles to overcome to produce and process the materials needed to wean cars from fossil fuels. The mine had several owners, and some of them filed for bankruptcy. As a result, some analysts and investors warn that many of the mines under development today may never be viable.
Dozens lithium mine are in different stages of development in Canada and the United States. Canada has made it a mission to be the main source of materials and components for electric vehicles. But most of these projects are years away from production. Even if they can raise the billions of dollars needed to go live, there’s no guarantee they’ll produce enough lithium to meet the continent’s demand.
Elon Musk, Tesla’s chief executive, said in July that being a supplier of lithium is a “license to print money”. But it is also a risky, volatile business. Ores buried deep in the ground may not have enough lithium concentrations to be profitable. Opposition from environmental groups or nearby residents can delay or kill projects.
Mines tend to be in remote locations. By industry standards, Sayona’s mine, located at the end of a 12-mile gravel road, is just around the corner. Many other projects are much more difficult to reach.
After the price of lithium halved between 2017 and 2020, the mine’s previous owner, Chinese battery maker CATL, closed operations and sought protection from creditors for the company. I own this property. Sayona, working with Piedmont Lithium, a lithium mining and processing company based in Belmont, NC, acquired the operation last year.
Some investors believe the hype around lithium has been overblown and have bet against miners. They believe some companies lack the expertise to blast the ore, get it out of the earth and separate the lithium from the surrounding rock. Lithium projects often experience delays and cost overruns.
The risk is reflected in the volatility of Sayona shares traded on the Australian Stock Exchange in Sydney. They peaked at AU$36 ($24) in April, dropped to $13 in June, and have recently been trading at around $28.
“Those of us in the industry are pretty confident that lithium will be in short supply over the next decade,” said Keith Phillips, chief executive officer of Piedmont Lithium, which owns a 25% stake in the Sayona’s Quebec project. He added, “Others are taking opposing views.”
What’s in the Inflation Reduction Act
For many in government and the auto industry, the main concern is whether there is enough lithium to meet the soaring demand for electric vehicles.
The Inflation Reduction Act, which President Biden signed into law in August, has raised the stakes for the auto industry. To qualify for certain incentives and subsidies in the law, these incentives are open to car buyers and automakers and have a total value of $10,000 or more per electric vehicle, battery manufacturer must use raw materials from North America or a country with which the United States has a trade agreement.
The world will also need more refineries, plants where raw lithium is processed into a concentrated form of the metal that goes into batteries. Most of the lithium is processed in China, and Piedmont and other companies plan to build refineries in the United States. The handling of lithium requires expertise due to shortages in supply, said Eric Norris, president of lithium at Albemarle, a mining and processing company in Charlotte, NC.
Lithium is the lightest known metal, and its ability to store energy makes batteries attractive. However, lithium deposits are embedded in other metals and minerals. That’s why lithium extraction can be extremely difficult.
The extractive industry, Mr. Norris said, “hasn’t honed its ability to build a capacity for constant and continuous transformation,” Norris said, noting that even his company, which has capital has a lot of experience, is also delayed in the construction of processing plants.
Albemarle operates the only active lithium mine in the United States, in Silver Peak, Nev., where the metal is extracted from brine, a liquid found underground. Some Tesla batteries contain lithium from Nevada, but the site’s total annual production is enough for about 80,000 vehicles. According to Kelley Blue Book, Americans bought 370,000 battery-powered cars in the first six months of 2022, and sales were speed up.
Albemarle also produces lithium in Chile and Australia. The company is working to reopen a lithium mine in Kings Mountain, NC and has plans to build a refinery in the Southeast.
Even those big projects won’t be enough to meet the demand California and other states moved to ban internal combustion engines. “It’s going to take advantage of everything we can and our competitors can do over the next five years to keep up,” Mr Norris said.
One of the first things Sayona had to do when she took over the La Corne mine was to flood the pit with water, revealing terraced walls of dark and pale stone from previous excavations. Lighter rocks contain lithium.
After being blasted and crushed, the rock is processed in several stages to remove waste. A short drive from the mine, inside a large building with curving blue metal walls, a laser scanner uses jets of compressed air to separate light-colored lithium ore. The ore is then refined in tanks filled with detergent and water, where the lithium floats to the surface and is washed away.
The final product looks like fine white sand but it is still only about 6% lithium. The rest consists of aluminum, silicon and other substances. The feedstock is sent to refineries, mostly in China, to be further refined.
Yves Desrosiers, a senior engineer and consultant for Sayona, started working at the La Corne mine in 2012. During a tour, he expressed satisfaction at what he said were improvements made by Sayona and Piedmont performed. Those include better dust control and a plan to restore the site after running out of lithium in a few decades.
“Productivity is going to be so much better because we’re fixing everything” Mr. Desrosiers said. Over the next few years, the company plans to upgrade the facility to produce lithium carbonate, which contains much higher concentrations of lithium than raw metal mined from the ground.
The operation will draw electricity from Quebec’s abundant hydroelectric plants, and will only use recycled water in the separation process, Mr. Desrosiers said. However, environmentalists still watch the project cautiously.
Mining is the mainstay of Quebec’s economy, and the area around La Corne is home to people whose livelihoods depend on mining iron, nickel, copper, zinc, and other metals. There is an active gold mine near the largest city in the region, Val-d’Or, or the Golden Valley.
Mining “is our life,” says Sébastien D’Astous, a metallurgist turned politician who is the mayor of Amos, a small city north of La Corne. “Everybody knows, either in the family nearby, who works in the mining sector or for contractors.”
Most people support the lithium mine, but a significant minority oppose it, Mr. D’Astous said. Opponents fear that another lithium mine being developed by Sayona in nearby La Motte, Quebec, could contaminate an underground river.
Rodrigue Turgeon, a local attorney and program co-leader of MiningWatch Canada, a monitoring group, has pushed to ensure the Sayona mines undergo rigorous environmental assessments. The Long Point First Nation, an indigenous group that says the mines are located in their ancestral territory, wanted to conduct their own environmental impact study.
Sébastien Lemire, who represents the region around La Corne in the Canadian Parliament, said he wants to ensure that the wealth created by lithium mining goes to the people of Quebec and not to outside investors. .
Mr Lemire praised activists for being “vigilant” about environmental standards, but he supported the mine and drove an electric car, a Chevrolet Bolt.
“If we don’t do that,” he said at a cafe in La Corne, “we are missing out on the opportunity to electrify transport.. “
