Canadian lithium may prove pivotal in US electrification

Canadian mining firm Snow Lake Lithium has said its newly established mine in Manitoba could play a pivotal role in supporting the North American vehicle manufacturing industry’s shift to electrification. Claiming to have explored just 1% of its 55,000-acre site, the firm estimates it will be able to extract 160,000 tonnes of 6%-lithium spodumene, which could quickly be transported to key production facilities via the Arctic Gateway railway – potentially saving thousands of tonnes in CO2 emitted by road and sea haulage. It also plans to operate the site “almost 100%” on hydroelectric power and with electric plant machinery to further enhance its sustainability credentials. Snow Lake’s proposals have been announced at a particularly pertinent time. Both Mercedes-Benz and Volkswagen have recently signed memorandums of understanding with the Canadian government to source raw materials for EV production in Canada. Snow Lake CEO Philip Gross said Canada will find itself “centre stage” as the world transitions to electrification. He cited the country’s relative abundance of natural resources, which is especially timely, given the US government’s new Inflation Reduction Act. As of 16 August, this mandates that EVs eligible for a federal cash incentive must comprise 40% material sourced from North America or a US trading partner by 2024 and that their batteries can’t contain materials processed by a “foreign entity of concern”. The expected capacity of Snow Lake’s mine potentially has huge ramifications for the future of the North American car industry, which, like the British one, faces an uncertain time as it seeks to build a stable raw-material supply chain. “What’s happening with the shortages that we’re experiencing isn’t acceptable economically or politically,” said Gross, highlighting how underdeveloped the European and North American lithium supply chains are compared with the Chinese one. “China has a 10-year head start. They control 85% of what we know today as the global lithium production market, either directly or indirectly. Germany is about five years ahead of North America. They recognise this issue and are starting to build hydroxide plants. But what they lack is the raw material.” Consumers in North America have now “overwhelmed manufacturers with demand”, driving EV sales up at a trajectory that’s not sustainable on the basis of current production capacity. Snow Lake has yet to sign partnership agreements with any car makers but has said the $27 million (£23m) it raised in a funding round last November is enough to finance preliminary drilling and metallurgy processes until 2025 or 2026. Gross believes the firm needs another $200-300m (£173-260m) “at a guess” to reach capacity but said initial production output, beginning in late 2024, could help fund the scale-up process. Discussions over a governmental support package are ongoing. For now, it’s uncertain whether Snow Lake’s lithium could make its way to battery production sites worldwide. Gross said: “On one hand, we shouldn’t be diverting resources off this continent. But on the other hand, this continent doesn’t have the ecosystem yet to be able to go from lithium to battery to EV.” He wants Snow Lake to play a core role in the establishment of this ecosystem and hopes that North America can build a domestic “rock-to-road” supply chain for crucial battery materials.