There is a minerals-driven “land rush” happening in Canada right now – and it is not only being led by gold hunters, but those looking to rejuvenate the nation’s lithium sector.
The search for new lithium reserves has become a world-wide phenomenon as the critical metal is becoming known in some quarters as the “new oil” due to its role as a key item in the global push to reduce emissions targets.
Canada had limited production of lithium from 2014 to 2019, it had none in 2020 and 2021. Now, the mining industry and the government are throwing their skills and money into trying to turn that around as quickly as possible.
While the country is currently reported to have only 2.5% of the world’s lithium reserves, it is well recognized that there is significant potential to expand those numbers quickly with an increased focus on exploration for the battery metal.
Canada has an estimated 2.9M tonnes of lithium resources (measured and indicated, inclusive of reserves) with potential developments tied to lithium brines in Alberta and Saskatchewan and hard rock opportunities in many regions.
With lithium prices skyrocketing on the back of rechargeable battery and electric vehicle (EV) demand forecasts, local and international miners are snapping up available land at unprecedented levels.
Notably, it has been reported that since December 2021, close to 4,000 new land claims have been registered in the greater Decelles Batholith area and the Pontiac Sub-province region, south of Val-d’Or and Rouyn-Noranda in Quebec – an area with a proven lithium exploration history.
While Canada is seen as being a latecomer to the current lithium exploration boom, the Canadian government is now doing its part by throwing billions of dollars at “critical minerals” exploration and development.
The Mining Association of Canada (MAC) recently welcomed the government’s “unprecedented support and extensive measures” to back the critical metals sector in its 2022 Budget.
MAC said Budget 2022 reinforced the government’s commitment to climate action and supply chain security goals by providing strategic funding and programmatic supports to Canada’s minerals and metals sector, underscoring a recognition that the world is better off on climate change when Canada wins on critical minerals.
New battery investment
In March this year, the Canadian government revealed another pillar in its plan to bring major international investments to Canada to secure a strong EV battery supply chain.
Minister of Innovation, Science and Industry, François-Philippe Champagne, Premier of Ontario, Doug Ford and the Mayor of Windsor, Drew Dilkens, were all on hand to welcome a major investment from world leading battery manufacturer LG Energy Solution (KOSE: A373220) and automaker Stellantis N.V. (BIT: STLA) to create a joint venture in Canada.
The joint venture will see a total investment of over C$5B in a facility to manufacture batteries for EVs in Canada. The battery facility will be located in Windsor, Ontario, and will supply Stellantis plants in Windsor and across North America. The facility will be operational by 2025.
The government of Canada says the investment will not only position the nation as a global leader in the production of EV batteries but also support the development of a sustainable domestic battery manufacturing sector in the nation.
“Canada has the opportunity to drive the clean energy future by building up our critical mineral supply chains – from production to processing, and the manufacturing of clean technologies. Today’s announcement will help ensure that we continue to lead the global fight against climate change and will put more Canadians in the driver’s seat on the road to a net-zero future, said Canada’s minister of natural resources, Jonathan Wilkinson.
Canada has the opportunity to drive the clean energy future by building up our critical mineral supply chains – from production to processing, and the manufacturing of clean technologies
Northwest Territories’ potential
It is not only the Canadian government backing the critical minerals charge. The Northwest Territories (NWT) Department of Industry, Tourism and Investment (ITI), recently noted the wilderness areas off Great Slave Lake’s shores hold significant potential for lithium and another critical battery metal: cobalt.
In a recent blog, the ITI said NWT presents a politically stable, near-untouched opportunity for investors, both in an advanced-stage nickel cobalt project and for further exploration as demand continues to grow with the proliferation of EVs.
It reported that with many confirmed showings, lithium exploration in the NWT dates back to the 1970s. While there are no advanced-stage projects, the expected spike in demand already has some major players rethinking their approach.
The ITI said that with a vast, largely unexplored land and dozens of showings of lithium and cobalt, the NWT is an attractive locale with massive potential to fulfill future demand.
“Our supportive populace is one of many unique propositions we can offer companies looking to invest,” NWT minister of industry, tourism and investment, Wally Schumann, said. Demand will only continue growing as more EVs and other battery-bearing devices hit the market – and the NWT is well positioned to provide the supply, she added.
Global demand
The World Bank has estimated that mineral production for key materials has to increase by up to 500% for the world to meet its climate change goals.
Canada is already a leading supplier of critical minerals, such as nickel, cobalt, uranium, and copper, with among the lowest carbon content in the world. The nation is confident it can have an important role in the development of new lithium reserves.
