Lithium mine may help with a
By Jack Ewing
© The New York Times Co.
About 350 miles northwest of Montreal, amid a vast pine forest, is a deep mining pit with walls of mottled rock. The pit has changed hands repeatedly and been mired in bankruptcy, but now it could help determine the future of electric vehicles.
The mine contains lithium, an indispensable ingredient in electric car batteries that is in short supply. If it opens on schedule early next year, it will be the second North American source of that metal, offering hope that badly needed raw materials can be extracted and refined close to Canadian, American and Mexican auto factories, in line with Biden administration policies that aim to break China’s dominance of the battery supply chain.
Having more mines will also help contain the price of lithium, which has soared fivefold since mid-2021, pushing the cost of electric vehicles so high that they are out of reach for many drivers. The average new electric car in the United States costs about $66,000, just a few thousand dollars short of the median household income last year.
But the mine outside La Corne, operated by Sayona Mining, an Australian company, also illustrates the many hurdles that must be overcome to produce and process the materials needed to wean automobiles from fossil fuels. The mine has had several owners, and some of them filed for bankruptcy. Some analysts and investors warn that many mines being developed now may never be viable.
Dozens of lithium mines are in various stages of development in Canada and the United States. Canada has made it a mission to become a major source of raw materials and components for electric vehicles. But most of these projects are years away from production. Even if they are able to raise the billions of dollars needed to get going, there is no guarantee they will yield enough lithium to meet the continent’s needs.
Tesla CEO Elon Musk said in July that being a lithium supplier was a “license to print money.” But it is also a risky, volatile business. Ore buried deep in the earth may have insufficient concentrations of lithium to be profitable. Opposition from environmental groups or nearby residents can delay or kill projects.
Mines tend to be in remote locations. By industry standards, Sayona’s mine, which is at the end of a 12mile gravel road, is just around the corner. Many other projects are far more inaccessible.
After the price of lithium fell by half from 2017 to 2020, the mine’s previous owner, Chinese battery maker CATL, shut down operations and sought protection from creditors for the subsidiary that owned the property. Sayona, working with Piedmont Lithium, a lithium mining and processing company based in Belmont, N.C., bought the operation last year.
Some investors believe that the hype around lithium is overblown and have been betting against mining companies. They believe that some of the companies lack the expertise to blast ore, haul it out of the earth and separate the lithium from the surrounding rock. Lithium projects often suffer delays and cost overruns.
The risk is reflected in the gyrations of Sayona shares traded on the Australian Securities Exchange in Sydney. They peaked at 36 Australian cents (24 U.S. cents) in April, plunged to 13 cents in June and have recently traded at around 28 cents.
“Those of us in the industry are quite confident that lithium will be in short supply for the next decade,” said Keith Phillips, CEO of Piedmont Lithium, which owns 25% of the Sayona’s Quebec project. He added, “Others are taking a contrarian view.”
For many people in government and the auto industry, the main concern is whether there will be enough lithium to meet soaring demand for electric vehicles.
The Inflation Reduction Act, which President Joe Biden signed in August, has raised the stakes for the auto industry. To qualify for several incentives and subsidies in the law, which go to car buyers and automakers and are worth a total of $10,000 or more per electric vehicle, battery makers must use raw materials from North America or a country with which the United States has a trade agreement.
The world will also need more refineries, the plants where raw lithium is processed into a concentrated form of the metal that goes into batteries. Most lithium is processed in China, and Piedmont and other companies plan to build refineries in the United States. But lithium processing requires expertise that is in short supply, said Eric Norris, president of lithium at Albemarle, a mining and processing company in Charlotte, N.C.
Lithium is the lightest known metal, and its ability to store energy makes it attractive for batteries. But lithium deposits come embedded in other metals and minerals. That is why extracting lithium can be incredibly difficult.
The mining industry “has not honed its ability, broadly speaking, to build conversion capacity repeatedly and consistently,” Norris said, noting that even his company, which has extensive experience, has suffered delays building processing plants.
One of the first things that Sayona had to do when it took over the La Corne mine was pump out water that had filled the pit, exposing terraced walls of dark and pale stone from previous excavations. Lighter rock contains lithium.
After being blasted loose and crushed, the rock is processed in several stages to remove waste material. A short drive from the mine, inside a large building with walls of corrugated blue metal, a laser scanner uses jets of compressed air to separate light-colored lithium ore. The ore is then refined in vats filled with detergent and water, where the lithium floats to the surface and is skimmed away.
The end product looks like fine white sand, but it is still only about 6% lithium. The rest includes aluminum, silicon and other substances. The material is sent to refineries, most of them in China, to be further purified.