Chinese interest in Quebec lithium

Chinese interest in Quebec lithium

Mayor of the Town of Erin, Ontario, and Leading in sourcing Innovative and Green Mineral Processing and Green Energy Projects

Published Mar 16, 2018

 16 March 2018

Chinese people are interested in Quebec lithium

The largest Chinese battery producer has acquired in the last weeks 90% of the shares of North American Lithium, a company that operates a lithium mine in La Corne, Abitibi-Témiscamingue, seen here during construction.

(Quebec) China's appetite for the electric car is pushing its industry to seek lithium for its batteries right up to Quebec. This interest is such that it is not only the processors who are interested in Quebec mining projects, but the battery producers themselves.

China's biggest battery producer has acquired in the last weeks 90% of North American Lithium, a company that operates a lithium mine in La Corne, Abitibi-Témiscamingue. The news went largely unnoticed here, but was reported in the Financial Times .

The buyer, Contemporary Amperex Technology (CATL), aims to become the world's largest producer of batteries for cars by 2020. But for that, it needs lithium: the demand continues to grow for the lithium-ion battery, present in phones and tablets and more and more used in cars.

"China is starting to wake up to electric vehicles. And there, they wake up and realize that the supply is difficult and limited, explains the CEO of Nemaska Lithium, Guy Bourassa. And they do not want to be at the mercy of other Chinese groups anymore. They want to go to the source. This explains why Chinese people are in Australia and Quebec looking for interesting deals. "

Nemaska Lithium plans to extract the spodumene concentrate at its Whabouchi mine, 300 kilometers from Chibougamau. The condensed ore will then be converted to lithium hydroxide and lithium carbonate at a Shawinigan plant.

The project, estimated at 549 million, unsurprisingly attracted the attention of the Chinese, in a context where the strong demand for lithium has quadrupled its price in five years.

"We won almost a price for Chinese tourism last year. We certainly had about fifteen Chinese groups who came to visit our facilities in the last year, "notes Guy Bourassa.

"They are business people from China. The battery manufacturers, whom we did not see three or four years ago, are now the ones who come to visit us. "

Nemaska Lithium, which could begin commercial extraction as early as this year, has had discussions with several Chinese groups, including battery manufacturers, for a possible partnership. Mr. Bourassa explains that he tries to convince them to buy the finished product, rather than just concentrate. "It's very achievable, according to our discussions," he says.

A scenario at North American Lithium is not to be discarded: it is quite possible that within a year Nemaska receives a significant contribution of Chinese capital.

But the Chinese are not interested only in important players like Nemaska. The CEO of Ressources Jourdan, a small mining company with a market capitalization of 3 million, was also approached.

"We are in discussions with financiers who work for battery producers," says Michael Dehn, whose company has rights not far from the North American Lithium field in La Corne.

"But they do not like putting 1 or 2 million into a project. Their minimum for these Chinese companies is 50 to 500 million, so for now we are too small. But as early as 2013, Chinese companies have been testing ore from our properties. The difference is that now the battery producers themselves are calling us. "

HOW MUCH LONGER ?

The current situation and strong demand have revived Quebec's lithium sector. It had had good times in the 50s and 60s.

"In the '60s, there was a race to find lithium because it was a strategic material for the US military. There were 29 indexes listed in Quebec. Ours was found in 1962. After, prices fell and it was dormant, "explains Guy Bourassa.

But as early as 2005, the price began to rise with the popularity of lithium-ion batteries, then, in the last few years, that of the electric car. There are five lithium mining projects at various stages of progress in Quebec, according to Mr. Bourassa.

North American Lithium had also resumed mining in a former mine abandoned. In 2016, a Chinese mining company, Jilin Jien Nickel Industry, acquired the company. Then, last week, the battery manufacturer CATL bought the deal.

The question now is whether the price of lithium will be maintained, an essential condition for these projects to be realized in Quebec. Michael Dehn, of Ressources Jourdan, hopes so, but notes that lithium is not immune to technological change. For example, the process of recycling or reusing lithium batteries could make great strides, he says.

"I'm hopeful that the lithium market will still be very strong for four or five years. There may be some people with a sense of urgency to start production. Maybe in five years lithium lessons will continue to rise as well. It will be perfect. "

Guy Bourassa is more optimistic. "The interest in lithium is not five, it's ten to fifteen, at least," he says.