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Ontario's critical minerals strategy is drawing battery makers Metal Tech News - September 28, 2022
LG Energy Solution has agreed to purchase 7,000 metric tons of cobalt from Electra Battery Materials' refinery in Ontario over a three-year span starting in 2023.
Avalon and Essar plan to build a plant at Thunder Bay, Ontario, that will produce battery-grade lithium for EV batteries.
When Ontario unveiled its critical minerals strategy earlier this year, the idea was to leverage the rich mineral endowment in the northern reaches of the province and the established manufacturing in the south to attract investment from some of the biggest names along the electric vehicle supply chain. With LG Energy Solution, one of the world's largest lithium-ion battery companies, inking two deals to source battery-grade cobalt and lithium from the province, it seems that this strategy is working.
"With our critical minerals strategy, cutting-edge technology and world-class workforce, Ontario has what it takes to build the cars of the future, and we're proud to see more and more companies come to Ontario for exciting partnerships," said Ontario Minister of Economic Development, Job Creation and Trade Vic Fedeli.
In back-to-back deals aimed at securing the materials needed for the batteries powering North America's rapidly growing EV market, LG Energy Solutions agreed to buy battery-grade cobalt from Electra Battery Materials Corp.'s emerging battery materials park in Ontario and battery-grade lithium hydroxide from the Thunder Bay facility that Avalon Advanced Materials Inc. is developing in the province.
"As we have recently announced our mid- to long-term strategy to focus on North America, the fastest growing EV market, these partnerships serve as a crucial step towards securing a stable key raw material supply chain in the region," said LG Energy Solution CEO Youngsoo Kwon.
"By constantly investing in upstream suppliers and establishing strategic partnerships with major suppliers of critical minerals, LGES will continue to ensure the steady delivery of our top-quality products, thereby further advancing the global transition to EV's and ultimately to a sustainable future," he added.
One of the many advantages Ontario has when it comes to its strategy to be the go-to source for EV battery materials is it hosts the only cobalt refinery in North America.
Once Electra completes the upgrades and expansion that are currently underway, this refinery will have the capacity to produce enough cobalt for the lithium-ion batteries to build roughly 1.5 million EVs per year.
Under a deal signed last week, LG Energy Solutions has agreed to buy much of the battery-grade cobalt produced at Electra's refinery over the next three years.
This will start with Electra supplying LG with 1,000 metric tons of cobalt contained in a cobalt sulfate product during 2023 and 3,000 metric tons each in 2024 and 2025.
In addition to the supply agreement, Electra and LG Energy Solution have agreed to cooperate and explore ways to advance opportunities across North America's EV supply chain, including sustainable sources of raw materials.
"LG Energy Solution is a global leader in the electric vehicle supply chain, and we are delighted to sign our first strategic supply agreement with such an important player in the lithium-ion battery market," said Electra Battery Materials CEO Trent Mell. "This is only the beginning of a larger strategic relationship with LG Energy Solution involving our other assets and growth initiatives in the North American battery supply chain."
Electra's other assets include the Iron Creek project in Idaho, one of the world's richest cobalt jurisdictions outside of the Democratic Republic of Congo.
"At a time of heightened geopolitical tensions, America must commit to securing a domestic supply of critical minerals for the green energy transition," said Mell. "Idaho is arguably the most prospective location in the world to identify new primary sources of cobalt outside the DRC."
According to a 2019 calculation, Electra's Iron Creek deposit contains 2.2 million metric tons of indicated resource averaging 0.26% (12.3 million pounds) cobalt and 0.61% (29 million lb) copper; plus 2.7 million metric tons of inferred resource averaging 0.22% (12.7 million lb) cobalt and 0.68% (40 million lb) copper.
Electra is also advancing plans to develop a battery materials park around its Ontario refinery that will include a recycling circuit that recovers lithium, nickel, cobalt, copper, and graphite from spent lithium-ion batteries; and a plant to produce nickel sulfate, another key lithium battery ingredient.
More information on Electra's proposed battery material park can be read at Electra Battery Materials Park on schedule in the March 23, 2022 edition of Metal Tech News.
On the same day LG Energy Solution inked a cobalt supply agreement with Electra, the world-class lithium-ion battery producer entered into a preliminary agreement to buy battery-grade lithium hydroxide from Avalon starting in 2025.
Avalon's road-accessible Separation Rapids project, about 45 miles (70 kilometers) north of Kenora, Ontario, is considered to host one of the largest complex-type lithium-cesium-tantalum pegmatite deposits in the world.
Under a partnership forged earlier this year with India-based Essar Group Company, Avalon is focused on developing a lithium supply chain that includes a mine at Separation Rapids and a refinery on a vacant industrial site in Thunder Bay, Ontario.
The Thunder Bay facility is expected to produce petalite, a lithium-aluminum mineral prized for specialty glass-ceramic products such as Corningware, by 2024, and battery-grade lithium hydroxide starting in 2025.
A preliminary economic assessment completed for Avalon in 2016 contemplated that the Thunder Bay plant would produce 14,600 metric tons of lithium hydroxide per year. A feasibility study currently underway will provide further details on the refinery's output.
Further details of Avalon's planned Thunder Bay lithium plant can be read at Avalon lithium plant slated for Ontario in the April 6, 2022 edition of Metal Tech News.
Under a non-binding memorandum of understanding, LG Energy Solution has agreed to buy at least 50% of planned initial lithium hydroxide production from Thunder Bay, with the potential to increase production as demand grows.
Avalon says this agreement further supports its plans to accelerate production of a sustainable and secure North American supply of battery-grade lithium at its burgeoning Thunder Bay refinery.
"We are delighted to enter into this agreement with LGES to support our aspirations of establishing the mid-stream processing capacity in Thunder Bay to take advantage of the many lithium resources that occur in northwestern Ontario to create the supply chain for the emerging lithium-ion battery manufacturing capacity in southern Ontario," said Avalon Advanced Materials President Don Dubar.
The connection between northern mining and southern manufacturing was exactly what Ontario set out to accomplish with the critical minerals strategy that it unveiled in March.
"The Critical Minerals Strategy is our government's blueprint to connect industries, resources and workers in our province's north to the future of manufacturing in the south as we build up home-grown supply chains," Ontario Premier Doug Ford said at the time. "Doing so has never been more important as we secure game-changing investments in our auto sector to build the electric vehicles and batteries of the future using Ontario minerals."
To leverage its rich mineral endowment, Ontario's Critical Minerals Strategy 2022–2027 includes Ontario's encouragement of mining and processing that will further anchor the downstream EV supply chain in the province.
"Our government's vision for Ontario's mining sector is to transform it into a leading producer of critical minerals," said Ontario Minister of Northern Development, Mines, Natural Resources and Forestry Greg Rickford. "The Critical Minerals Strategy is our roadmap for driving this transformation and ensuring that Ontario takes its rightful place in the global supply chain for the economy of the future."
Further details can be read at An Ontario critical minerals strategy in the March 23, 2022 edition of Metal Tech News.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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