A Remote Part of Canada Could Be the Key To Easing EV Supply Issues

Could the Canadian wilderness hold the key to North American lithium independence?
Written by Andrew Kidd
Reviewed by Kathleen Flear
Oct 7, 2022
Could the remote reaches of a Canadian province be the solution to the scarce lithium supply driving up
electric vehicle
development costs for automakers and sale prices for consumers?
That's what one mining outfit is betting on as deadlines for domestic electric vehicle sourcing compliance loom on the horizon and the
supply chain shortage
continues.

Lithium mines in development

The
New York Times
reports that the U.S. and Canada are seeing the development of dozens of lithium mines, with Canada's objective to become a preeminent supplier of raw materials for batteries and components for electric vehicles.
The rub is that production of these crucial materials is years out, and even with billions of investments, there's no assurance that they'd produce enough lithium for North America to begin with.
Specifically, one site a few hours' drive northwest of Montreal in the wilderness of Quebec is set to open early in 2023 and will be the second source of lithium to supply the North American automotive industry. 
And it's key to the Biden administration's aims to eliminate the continent's dependence on Chinese minerals.
The mine is owned and operated by an Australian company—the latest in a line of owners after the pit changed hands several times. The company, Sayona Mining, is working with North Carolina-based lithium mining and processing company
Piedmont Lithium
to run the operation.

A tricky endeavor

The NYT reports that industry investors think the lithium rush is out of the wheelhouse of the mining companies flocking to these deposits. 
The argument is that these companies are woefully ill-equipped to handle the tricky process of mining and separating lithium from the pit, as demonstrated by previous lithium projects fraught with delays and blown budgets.

Will it be enough Lithium?

Even if this operation starts producing lithium profitably, it might not meet the demand created by the
ever-increasing adoption of electric vehicles
—helped by a number of electric vehicle incentives encouraging consumers to go green and making automakers source domestically or with a domestic trade ally to qualify.
There's also the issue of processing capacity, which doesn't currently exist at the scale required to meet future needs, per industry analysts. Extracting lithium that's embedded in other minerals can be difficult.
And the only other active lithium mine in the U.S. has an annual output capable of supplying around 80,000 electric vehicles, but with sales rising—370,000 electric vehicles sold in the first half of 2022—supply is already dwindling.

What's going to happen?

It depends on how well these new lithium mining and processing outfits are able to roll with the punches of a fussy mineral, tight supply and nearby residents who don't want lithium mining in their area. 
A First Nations group wants to conduct an environmental impact study for the Quebec lithium mine, noting that it sits on ancestral tribal land.
Until the lithium supply chain is built up domestically in the U.S. and Canada (or automakers find a more economical alternative to lithium batteries) we'll probably see more automakers purchasing (but not publicizing) Chinese minerals in the interim. 
But as the deadline for sourcing compliance nears, we'll probably see a mad scramble to invest in local options—assuming a future administration doesn't reverse the Biden administration's measures to eliminate gas-powered vehicles.
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