As the world races toward “the biggest supply-demand disconnect in commodity history,” Snow Lake Lithium CEO Philip Gross tells us about his company’s plans to open the first mine all-electric lithium battery in the world in Canada.
Now that we are beginning to see the first chaotic and destructive effects of climate change begin to wreak havoc across the globe, the world seems to have finally reached a consensus that we need to decarbonize as quickly as possible. Which is great – better late than never. But a huge percentage of the push to net zero carbon by 2050 will depend on batteries, and the simple fact is this: there won’t be enough lithium.
There are a lot of them in the ground, but as we wrote a few months ago, not enough are coming out, and while everyone seems to be expecting electric vehicles continue to conquer the automotive market, the figures seem disastrous. By 2030, if all existing mines keep producing and everything under construction comes to fruition, there will still be barely enough metal to satisfy half demand. This will be a lithium resource squeeze of epic proportions.
“Anyone who doesn’t see this coming is sticking their head in the sand,” Gross says, clearly exasperated. “And it’s not just top down, governments are pushing this on consumers. Consumer demand for electric vehicles is already insane. We have a new generation that is finally waking up to these issues, and they want to do something about it. These people are already putting their names on two-year waiting lists for electric cars they deposit the payment and literally wait years for their cars. It’s wild. And that’s just the tip of the iceberg, because all the electric cars you see these days are high-end – cars priced at a minimum of US$50-60. We’ll be switching to the $30,000 car soon.”
“Consumers are overwhelming manufacturers,” he says, “so manufacturers are pushing their battery guys. And the battery guys are saying OK, we’re going to build another factory for you. They’re now building 13 or 14 gigafactories, just in North America. there is no raw material to answer this. This is massive, organic demand growth that didn’t exist three or five years ago. It’s a monumental disconnect between supply and demand, and there’s no way to fix it now, other than to crawl to China. China has no interest in supplying you with lithium or batteries. Their end goal is to dominate the automotive industry.”
While the bulk of the world’s known lithium resources are in Australia and South America, Chinese companies hold significant stakes in most mining operations. More than two-thirds of the world’s lithium processing is done in China, and China manufactures around 80% of the world’s batteries. Lithium mines take at least a decade to be operational; the western world is unlikely to catch up.
The Chinese government caught a glimpse of the effects of heavy urban pollution around 2010 and had the foresight to make big decisions, invest heavily in electrification and lock down the supply chain of lithium, cobalt, neodymium and other critical metals. Now it is becoming clear that this is a legitimate threat to national security resources for countries like the United States.
“Nobody was interested in lithium for decades,” Gross says. “People were using it in ceramics and some pharmaceuticals, and that was the whole market. The Snow Lake lithium resource was discovered in the 1930s, and it was a huge disappointment. They kept drilling, desperately hoping for gold. No one in the history of the world has ever bothered to look for lithium. No money has been spent on it, and no money has been spent on ecosystems. If you mine lithium from the ground in North America, you can’t do anything with it unless you send it to China.”
So as Snow Lake Lithium races to create the world’s first all-electric lithium mine to extract this metal from the ground and turn it into 6% spodumene, it has signed a memorandum of understanding with Korean battery giant LG. , which includes a hydroxide processing plant. nearby, capable of taking that spodumene and turning it into battery-grade lithium ready for the gigafactories. So begins a fledgling North American lithium battery supply chain.
The 55,000 acre Snow Lake site is located approximately 400 miles north of Winnipeg, and the LG plant will be nearby, perfectly positioned to ship bulk products to the central United States and to all major centers manufacturing by rail. With only 1% of its property explored, Gross says the company expects to supply approximately 160,000 tonnes of 6% spodumene per year, opening in 2025 or 26.
It will be a super clean operation; it is not a brine-based lithium mining operation that could contaminate groundwater and drinking water supplies.
“We do hard rock,” Gross says. , For the best or for the worst. We know it and we can mitigate its impact.
“We are very fortunate with our location,” he continues, “not only because it is a well-established mining area with an integrated workforce and a government that understands the resources, but also because that Manitoba is a 99% renewable energy zone. There are criticisms – totally misplaced and completely misleading, in my opinion – that if you’re driving an electric vehicle, you’re somehow doing something worse for the climate than a gasoline-powered car. fuel, there is no more. Almost all components of a battery can be reused, rejuvenated and recycled. And it is possible to mine in a carbon-neutral, responsible and sustainable way. We should be responsible to our customers. I think in the not too distant future, everything you buy will have a carbon impact, like the calories on a chocolate bar. We therefore cannot compromise on the environmental impact, it is our responsibility.
Snow Lake is working with Swedish company Epiroc, which will supply the site’s all-electric mining equipment.
“If we were to go into production today,” Gross says, “some of this equipment doesn’t exist yet. They’re working on it right now. challenges ahead, nothing is straight forward In Canada in winter it gets to -35, -40 Special conditions, lots of tests have to be done to make sure the batteries are working optimally, all that kind things. But that’s the challenge we took on.”
If all goes according to plan, Snow Lake will supply enough lithium to North America to make batteries for about 500,000 electric cars a year. That’s a drop in the bucket compared to the roughly 17 million vehicles sold each year before the pandemic hit. Consumer demand is already shifting strongly towards electric vehicles, and this trend is expected to accelerate significantly.
“The real craze in the lithium market,” says Gross, “doesn’t hit until 2025, 26. Look at electric cars alone; in 2021, there were six and a half million electric cars sold globally, double of the year before. Let’s say this year it’s 10 million. That’s not a lot of cars yet, but we’re at the point where you see it doubling year on year. There’s a waterfall that happens unfolds from around 2025, where legislation begins to take effect, corporate fleets begin electrifying, manufacturers will begin rolling out new, more affordable product lines, infrastructure will grow to support more widespread adoption of VE… That’s when it’s going to get really crazy.”
North America’s late entry into the electric vehicle party could end up posing an existential threat to its auto industry, if it can’t get its hands on enough raw materials to compete with a flood of Chinese imports. cheap and high quality. We are certainly heading into interesting times.
Source: Snow Lake Lithium
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