Lithium mining on the Prairies – boom or bust?

The small mining town of Snow Lake in northern Manitoba, about 200 km east of Flin Flon, has had its share of booms and busts. Lithium is the newest resource promising to put the town back on the proverbial map.

As the world transitions to electric vehicles (EVs), the demand for lithium, a key component in EVs’ lithium-ion batteries, will increase sixfold to 500 kilotons by 2030, according to the International Energy Agency, in its “Global Supply Chains of EV Batteries” report.

About 50 new mines are required to meet this demand, and one could be in Snow Lake, operated by Snow Lake Resources Ltd., also known as Snow Lake Lithium.

The possibility of a lithium mine is welcome news to Snow Lake mayor Peter Roberts.

“We’re cautiously optimistic that this will get off the ground,” Roberts told The Flatlander.

Over the past several years, mining companies had promised to set up shop near the town, only never to appear. 

“We’ll try and help them if we can in any way. Like, we’re trying to locate a storage area for their (lithium) ore right now,” Roberts said.

Snow Lake Lithium’s proposed mine is unique because it will be almost 100 per cent electric. Powered mainly through hydroelectricity, it will be a first of its kind. 

Quebec company Meglab will supply the electric mining equipment. 

“Why go diesel if you can go electric?” Snow Lake Lithium CEO Philip Gross said during an interview from his home in London, England.

Currently, Snow Lake Lithium is conducting feasibility studies for its proposed mine. 

Lithium in Canada

Canada has 2.9 million tons of known and accessible lithium deposits, according to the 2021 version of the United States Geological Survey, which keeps a tally of known resource amounts from around the world. 

The amount of lithium in Canada compared to other countries is significant.

Other countries with large amounts of lithium include:

• Bolivia, with 21 million tons; 
• Argentina, with 19.3 million tons; 
• Chile, with 9.6 million tons; 
• Australia, with 6.4 million tons; 
• China, with 5.1 million tons; and 
• Congo (Kinshasa), with 3 million tons of known and accessible lithium deposits.

What is lithium?

Lithium is a light, highly reactive element. 

Its origins likely go back to the beginning of the known universe 13.8 million years ago with the Big Bang, when many lighter elements formed along with the universe. 

While the element is getting a lot of attention because of the EV boom, lithium has played a vital role in our lives for decades, said Dr. Tania Martins, a Precambrian geologist with the Manitoba Geological Survey and an expert on lithium.

In addition to lithium-ion batteries, lithium’s other uses include ceramics, glass, and medication.

In nature, lithium can be found in salt brines and encased in hard rocks. Because of its highly reactive nature, Martins explained, it cannot exist on its own. 

“Lithium always has to form a compound,” she said.

Lithium must combine with at least one other element to form a mineral. The most common mineral that contains lithium is spodumene. 

Lithium in Manitoba

While Manitoba has salt brines, most of the province’s lithium is in hard rock formations. The rock containing spodumene, which, in turn, holds the lithium, is called pegmatite, which formed when magma cooled beneath the earth’s surface. 

Pegmatite contains coarse grain crystals that can measure metres across, said Dr. Tania Martins, a Precambrian geologist with the Manitoba Geological Survey and an expert on lithium.

Manitoba’s pegmatites in and around Nopiming Provincial Park and Whiteshell Provincial Park are approximately 2.6 billion years old. In comparison, the pegmatites found near Snow Lake are about 1.7 billion years old, said Martins, who wrote her Ph.D. thesis on lithium-bearing pegmatites. 

Martins said a mining company needs to extract and crush the pegmatite containing the spodumene for lithium in hard rock. Then the spodumene goes through a chemical process called flotation to extract the lithium from the spodumene.

Tanco lithium mine 

Manitoba is home to the only currently active lithium mine in Canada, the Tantalum Mining Corporation of Canada, also known as the Tanco Mine. This underground mine is near Bernic Lake northeast of Lac du Bonnet and close to the southern end of Nopiming Provincial Park. Along with lithium, Tanco, owned by the Chinese company Sinomine Resource Group Co. Ltd., extracts cesium and tantalum. The mine has been in operation since 1969. Sinomine purchased it in 2019.

Sinomine opened Tanco back up to lithium mining in October 2021, according to a news release from the company, which states there are over 4.6 million tons of spodumene to mine at the location.

As part of this decision, Sinomine renovated and restored the mine’s spodumene processing system, which can handle 400 tons of spodumene daily. 

Sinomine expects Tanco to produce 30,000 tons of 5.5 per cent lithium oxide spodumene concentrate annually. 

The company shipped the first 2,000 tons of spodumene concentrates back to China to help meet the raw material demand there, according to another Sinomine news release.

Tanco Mine’s general manager, Joey Champagne, could not be reached. 

Other potential lithium projects

New Age Metals, a mining exploration company, has seven lithium projects. Two of them are ready to drill, and another is seeking permits. As such, New Age Metals is the largest single claim holder in the region, CEO Harry Barr said in an interview with The Flatlander. The company has 21,611 hectares of land claims, mainly in the area surrounding Bernic Lake, with a couple near Cat Lake further north.  

The three New Age Metals projects currently underway are: 

• Lithium 1 located southeast of the Tanco Mine site, and is mostly located in Whiteshell Provincial Park
• Lithium 2 located north of the Tanco Mine site at Cat Lake. This claim extends into the Nopiming Provincial Park
• Lithium West located west of the Tanco Mine site.

About Lithium 1, Barr said: “There are forty known pegmatites. We’ve got some really good numbers, up to 4.1 percent on the surface. Anything that is one percent or better in terms of your lithium projects is pretty good.”

Lithium 2 is a historical resource site New Age Metals drilled once before, and they’re planning to drill again in November. It contains more than 540,000 tons of 1.4 per cent lithium, which Barr classified as a “pretty good grade” of concentration. 

Currently, New Age Metals is having ecological studies done at Lithium West.

Portions of some New Age Metals’ land claims, including Cat Lake, Lithium Two, Lithium North, and Lithium East, sit within Nopiming Provincial Park. And, a portion of their Lithium One project site sits within Whiteshell Provincial Park. 

New Age Metals does exploratory drilling to determine if it’s worth putting a mine in place. The core samples they collect show how much potential an area has for extracting lithium. 

“You could do five or ten rounds of drilling or more,” said Barr, adding his company is working on making more of their land claims drill-ready.

For its lithium exploration, New Age Metals has partnered with Australian mining company Mineral Resources Ltd., which Barr said is the fourth largest lithium producer in the world. 

Under their agreement, the Australian company would decide what to do with the mined lithium. Barr said it’s unknown now whether Mineral Resources Ltd. would process it here or have it shipped to Australia.

Barr said he knows several other exploration companies working in the Winnipeg River pegmatite field. 

Lithium in Saskatchewan

According to the Saskatchewan Geological Survey’s website, hard rock lithium has been identified in northern areas of the province, including Bailey Lake, Cree Lake, Marchant Lake and Mavor Lake. 

However, the focus on lithium extraction in Saskatchewan is of the salt brine variety in the southern part of the province, near Torquay.

Leading the way is Prairie Lithium.  

According to its website, the company, headquartered in Emerald Park, acquired over 362,000 acres of nearly contiguous subsurface mineral permits in Saskatchewan, stretching from the United States border west of Estavan to southeast of Weyburn. 

These land holdings are in the Williston Basin. This geological feature includes parts of eastern Montana and western North Dakota and South Dakota, along with a portion of southern Saskatchewan. The basin is known for having large petroleum and potash deposits. 

The company has entered an agreement with DEEP Earth Energy Production Corp., a Saskatchewan-based geothermal power company, to exchange subsurface mineral permits and establish an area of mutual interest.

Prairie Lithium received $7.5 million in funding as part of a private placement led by PFM Capital Inc, a Saskatchewan private equity investment firm.

Proprietary technology

Prairie Lithium claims its way of extracting lithium is more environmentally friendly than traditional methods. Because the lithium isn’t encased in rock, no mining is necessary. Instead, the brine containing the lithium needs to be pumped out of the ground and the lithium extracted from that brine. 

In other places that extract lithium from salt brines, like Chile, the brine is left to evaporate in the sun, leaving behind the lithium, much like how saltwater will leave the salt behind as it evaporates.

Prairie Lithium uses its proprietary technology called Prairie Lithium Ion Exchange (Plix) to extract the lithium from the brine without having to evaporate the brine.

“Prairie Lithium’s Plix technology and process allow lithium to be selectively removed from brine while eliminating the requirement for solar evaporation ponds,” the company said in a news release.

In that news release, the company said Plix had been third-party verified by Coanda Research & Development, a company based in Burnaby, BC.

“Three separate lab technicians, working under supervision, repeatedly achieved greater than 99% lithium extraction in less than five minutes from brine at Prairie Lithium’s test facility in Emerald Park,” the statement says. 

In addition to extracting almost all the lithium, Plix rejects most of the sodium, calcium, magnesium, and potassium.

“The result of this is a lithium chloride solution that can readily be converted into lithium hydroxide and further converted into lithium carbonate,” the news release stated.

Prairie Lithium says it is also more environmentally friendly because it utilizes existing infrastructure, like wells and roads that were created for the oil industry. 

As Prairie Lithium’s technology and processes are modular, its website says, they will easily be able to scale up their lithium extraction efforts in the future. 

Efforts to reach Prairie Lithium’s CEO Zach Maurer were unsuccessful. 

Both provincial governments support the efforts of exploration and extraction companies to take advantage of the new demand for lithium. The federal government has pushed for more vehicle electrification to help it meet its international sustainability goals and has entered into agreements about critical minerals with other countries. 

Manitoba government

Manitoba premier Heather Stefanson announced at the Prospectors and Developers Association of Canada conference in June that the province, in association with the Manitoba Chambers of Commerce and the Manitoba Mineral Development Fund (MMDF), was dedicating $10 million to the mining industry in the province. 

The funding will support Manitoba’s mineral sector supply chain over the next three years. 

Since 2019, the MMDF has provided mining and mineral development funding throughout Manitoba. Communities, businesses, indigenous groups, municipalities or not-for-profit organizations can apply for one-time grants from the MMDF for activities that advance new mining opportunities and support indigenous communities in collaborative resource development. 

To date, MMDF has allocated more than $5.4 million to 41 projects.

Manitoba’s minister of natural resources and northern development, Greg Nesbitt, could not be reached. 

Saskatchewan government

The Saskatchewan Geological Survey, part of the Ministry of Energy and Resources, has conducted a subsurface brine sampling program since 2011, focusing on lithium and other elements.

The province also has the Saskatchewan Advantage Innovation Fund and the Saskatchewan Petroleum Investment Incentive, which Prairie Lithium has taken advantage of, according to a news release from the province.

That same news release outlines the Targeted Mineral Exploration Incentive program, which provides a 25 percent rebate, up to a maximum of $50,000 per year, to encourage drilling activity in support of exploration in Saskatchewan. 

Jim Reiter, Saskatchewan’s minister of energy and resources, said the province has a “red tape committee” that constantly reviews its various permit and licensing processes to keep them streamlined. He noted the province wants to be cautious while remaining business-friendly.

“The ministry has been working with the industry to try and see what sort of barriers there are to development and try to get those barriers out of the way for them,” Reiter said in an interview with The Flatlander. 

The minister said the hope is that lithium can grow the Saskatchewan economy, similar to how potash, oil and gas have created jobs and revenue for the province.

While there is currently no EV or battery manufacturing in the province, Reiter said the Saskatchewan Research Council (SRC) is building a rare earth materials processing plant in Saskatoon, which should be operational in 2024. The provincial government provided $31 million in funding to the facility in 2020 and an additional $20 million this past June.

When there is a resource like lithium with huge potential, Reiter said, the province is obligated to develop it to its full potential. 

Federal government

In early 2020, the federal government finalized the Canada–U.S. Joint Action Plan on Critical Minerals Collaboration, an agreement meant to advance the two countries’ interest in securing supply chains for critical minerals, including lithium, according to a news release.

The accompanying action plan guides cooperation between the two countries in industry engagement, supply chains, mineral resources information and collaboration with other countries. 

The plan promotes joint initiatives in research and development collaboration, supply chain modelling, and increased support for the industry.

In Canada’s 2022 budget, the federal government aims to provide up to $3.8 billion in support of critical mineral exploration over eight years starting in 2022-23. The funding is meant to implement Canada’s first Critical Minerals Strategy and includes $80 million for public geoscience and exploration programs, a doubling of the Mineral Exploration Tax Credit; $1.5 billion for new infrastructure investments in critical regions, and $1.5 billion for mineral processing, materials manufacturing, and recycling for essential mineral and metal products in the battery and rare earth elements supply chain.

More specifically for lithium, the federal government has continued its support and funding for EV initiatives. While not directly tied to lithium exploration and extraction, a greater global demand for EVs necessitates more demand for lithium used in current EV battery technology. 

During this year’s EV Week, from July 26 to 30, the Government of Canada announced funding of over $32 million to install 853 electric-vehicle chargers across the country. This is part of its broader goal to have all new light-duty cars, and passenger trucks be zero-emission by 2035.

In August, the feds signed memorandums of understanding (MOU) with German automakers Volkswagen and Mercedes-Benz. 

The agreement with Volkswagen focuses on sustainable battery manufacturing, cathode active material production and critical mineral supply, and setting up a Canadian office for PowerCo, Volkswagen’s newly formed battery company.

Meanwhile, the Mercedes-Benz agreement centres around EV and battery supply chains. It supports creating a sustainable critical mineral supply chain in Canada, collaborating in research and development, and identifying potential investments in Canada.

First Nations

In Canada, mining and exploration projects must include local indigenous bands if exploration or proposed mining is to take place on traditional lands. 

Barr said that in Manitoba, New Age Metals has an MOU in place with the Sagkeeng Anicinabe First Nation. 

This agreement outlines how they will work together, what the First Nation expects from the company for reporting, and a framework of how future deals would look if exploration and mining go forward.

Barr said New Age Metals offers training and employment initiatives to young people in the First Nations they work with in Manitoba and Ontario.

Sagkeeng Anicinabe First Nation chief Derrick Henderson could not be reached. 

According to the Government of Canada’s Indigenous Mining Agreements online information tool, there are eight official agreements between companies and First Nations in Manitoba, including the one between New Age Metals and Sagkeeng First Nation, and 28 agreements in Saskatchewan.

The Wilderness Committee weighs in with environmental concerns

While the potential lithium mining boom may be good news to those in and adjacent to the mining industry, not everyone is pleased with all aspects of it. 

Eric Reder, wilderness and water campaigner for the Wilderness Committee, an environmental protection organization, says mining should not happen in provincial parks or other designated protected zones, especially during the ongoing climate and biodiversity crises. 

“Parks are supposed to be for parks,” Reder said during a recent interview with The Flatlander. “They’re supposed to be for nature and the preservation of biodiversity. We have to handle the biodiversity crisis and the climate crisis at the same time. They are intertwined. So, we can’t say we’re going to sacrifice this chunk of nature so we can get electric batteries so we can fight the climate crisis. That is not a viable solution anywhere on the planet, and any government that puts that forward as a message is failing us.”

Unlike logging, a mobile operation that can be moved if a part of the forest is protected, mining can only occur at the spot where the mineral is found. Therefore, Reder said, governments need to handle mineral extraction differently and may need to say no to exploration companies. 

He cited the example of the proposed Pebble Mine in Bristol Bay, Alaska, in the United States. One of the largest copper deposits ever discovered in the world sits below Bristol Bay. Still, the proposed mine has not gone forward because of the importance of the salmon run that goes through the bay and into its tributaries. 

Reder said he would be in favour of nationalizing all minerals, especially ones that have been officially deemed “critical,” so everyone can benefit from them, and not just certain companies because ultimately, it is the public – along with the wildlife – that is burdened with the destructive impacts of mining.

“If these minerals are so critical,” Reder said, “why are we paying wildcat and cowboy companies to come in and bulldoze and be like: ‘I claimed this. These are mine, and I get to make a billion dollars off this.’ If the minerals are critical and needed, then we nationalize all of the mining claims inside a provincial park. That’s it. If it’s critical, then the public has to handle it.”

If exploration and mining do get the green light to go forward in the province, Reder said, he would like to see a “three-to-one” trade for allowing companies to develop the land. For example, if a company is permitted to create 200 hectares for mining within Nopiming Provincial Park, 600 hectares should be added to the park in a different region. 

However, in Reder’s opinion, the current Progressive Conservative government in Manitoba likely wouldn’t do something like that because they don’t seem interested in protecting more of Manitoba’s wild areas.

Reder has documented development in natural areas for decades, and he said companies operating in Nopiming recently are using problematic exploration techniques. 

For example, Reder said he saw machinery near Cat Lake clearing a trail for drilling in November 2021, which shouldn’t have been allowed since the ground is not frozen then, meaning heavy machinery can cause extensive damage. 

Reder recounted that when he returned to that exact spot this July, he found the core samples drilled in November hadn’t been taken from the site yet. 

“There was no rush for them to bulldoze the forest in November,” he said. “They didn’t even process the ore.”

Reder wants all new mineral mining banned in provincial parks. He added that companies with claims should be obligated to use them within 10 years or lose them. When these companies apply to do their preliminary exploration work, they should be vetted to ensure they know what they’re doing and that the work won’t have a substantial ecological impact.

Along with members of the Sagkeeng First Nation, Reder hosts a one-day river paddle up the Bird River every year on World Rivers Day, the fourth Sunday of September. This year, the paddle was on Sept. 24. It’s meant to draw attention to the importance of waterways in the province. 

Currently, there is a proposal to have Bird River added to Nopiming Provincial Park.

Following the rules

CEO Harry Barr said that New Age Metals always follows the environmental guidelines put in place when it comes to their exploration work. 

“We adhere to the strictest rules when it comes to bringing in equipment and drill rigs, and we work with companies that have the same record as we do,” the CEO said.

Right now, the company is finalizing a significant report about the steps they take to mitigate the environmental and social aspects of mining, down to how much fuel a drill rig would use and how much pollution it would put back into the air.

At this point, Barr noted, any mines related to New Age Metals’ exploration would likely be underground mines. However, if enough lithium is found near the surface, the mines may start as open-pit and progress underground. 

Dr. Tania Martins with the Manitoba Geological Survey said mining base metals, like gold and copper, can be associated with generating acidic water, which is an environmental concern. However, lithium doesn’t pose that threat to waterways. 

“In the case of these types of rocks, they’re very benign,” she said” “There is not much that can be impactful on the environment.”

The geologist said there would be elevated lithium in the groundwater near lithium mines, but not much more than naturally occurring levels, as lithium is a “very mobile element” entering waterways from exposed rock outcrops.

Saskatchewan aims to balance industry and environmental stewardship, said Jim Reiter, minister of energy and resources for the province.  

Author: EVs won’t solve Canada’s car dependence

However, even with all the environmental precautions in place, mining lithium for EVs is the wrong way to deal with the current climate crisis, says Paris Marx, author of Road to Nowhere: What Silicon Valley Gets Wrong about the Future of Transportation, and host of the weekly podcast “Tech Won’t Save Us.” 

While Marx acknowledges EVs will play a role in cutting emissions, simply switching from internal combustion engine vehicles to EVs will not address the more significant problem of Canada’s car dependence. 

“The focus, especially at the government level, at least in addition to electric vehicles, should be on expanding public transit; ensuring there is safe, reliable cycling infrastructure for people; ensuring that we’re investing in the rail network to make it more reliable and accessible,” he said.

Marx said that if public transit and cycling infrastructure were better, more people would transition to those types of transportation, which would lessen the need for resource extraction. 

He added that promoting alternative transportation doesn’t generate revenue, so that might be a tough sell to governments.  

Marx said governments are focused on increasing the number of electric vehicles because it creates manufacturing and resource extraction jobs.

Looking at lithium extraction through a revenue-generating lens may not lead to the best societal or environmental outcomes, he noted.

One of Marx’s concerns with a potential lithium mining boom in Canada is what he sees as the tendency for provincial governments to minimize environmental regulations to fast-track development. He pointed to Alberta’s oil and gas industry as an example of creating ecological damage because of weakening environmental regulations. 

Right now in Quebec, Marx said, citizens are pushing back on a proposed lithium mine due to a lack of transparency in the process and a fear that it may not be as environmentally sound as the company claims. People in other countries like Spain and Portugal are also against proposed lithium mines due to environmental concerns. 

Marx said lithium being used in EV batteries allows mining and exploration companies to claim their operations are in service of green technology while still being environmentally destructive. 

He said governments should ensure proper environmental regulations are in place before any lithium boom takes off. 

Challenges

 There’s been doubt cast on whether there will even be a lithium boom. 

Global investment bank Goldman Sachs made headlines earlier this year when it released a report that said it expected lithium demand to subside throughout the year. Fellow investment bank Credit Suisse Group AG concurred, saying lithium was due for a market correction. 

“Demand would decrease as ‘supply from unconventional new sources overwhelms demand,’” according to a Bloomberg article on the Goldman Sachs report. There was no mention in the article as to what these unconventional new sources may be. 

China’s headstart on the rest of the world regarding rare earth minerals is also of concern. While western governments are waking up to their importance now, China has spent the last few decades shoring up its rare earth minerals extraction operations in places like Africa that have a lot of resources. Currently, much of the EV battery supply chain runs through China because of this.

Creating a North American EV battery supply chain is the impetus of many of United States president Joe Biden’s recent legislative acts, including the current Inflation Reduction Act, which encourages EV companies to expand operations and raw material sourcing in North America.

However, even with this legislation, automakers are making deals elsewhere, like Ford’s agreements announced in April and July to procure lithium from Argentina. 

Snow Lake Lithium’s CEO Philip Gross said the company has tried to engage major North American and European automakers in discussions about lithium sourcing. While some conversations have happened, it’s a slow process. 

“They’re moving at the speed of an OEM (original equipment manufacturer),” Gross said. 

Automakers themselves remain tightlipped. Representatives from Ford, Toyota and BMW, declined to comment, while Volkswagen (before their announced deal with the Canadian government) and General Motors representatives could not be reached. Tesla has not had a media relations department since 2018 and does not respond to media inquiries. 

Nissan spokesperson Didier Marsaud said the company is “not involved in any research or manufacturing activities” about EV batteries. Stellantis spokesperson Lou Ann Gosselin said: “It is too early in the supplier sourcing, manufacturing, and construction process for us to discuss these kinds of details.”

Lastly, ”battery technology is continuing to progress. While lithium is the main element required in current EV batteries, there is no guarantee it will continue to be in the future. If another form of battery technology is developed, the lithium boom could become a bust. 

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