Canada has the potential to be a linchpin in the global energy transition, with the right investments and programs in place.
Canada has been a leader in the clean technology space for quite some time. More than 80% of our power already comes from non-emitting sources, and earlier this year, Canada’s Minister of Energy Jonathan Wilkinson announced a goal to decarbonize the national grid by 2035.
As demand for electric vehicles and utility-scale energy storage batteries skyrockets, the world will need to rapidly expand the lithium supply chain. Canada is positioned to excel in the production and refining of critical minerals as it holds the 6th largest lithium reserves in the world.
The Canadian Critical Minerals Strategy was announced in 2022 with a $4 billion budget, a project that is said to rival any previous nation-building project in Canada’s history. But despite its significant reserves, Canada is currently a net importer of lithium and lithium products. Canada, and British Columbia in particular, has an opportunity to change this by bringing lithium refining and mining home and bolstering the national economy.
Why Lithium?
Lithium is a critical ingredient in lithium-ion electric batteries because it is lightweight and has a high voltage capacity. Lithium is found in hard rock, saltwater brines, clays, and recycled materials. The majority of Canada’s 2.9 million tons are found in Quebec, Alberta and Saskatchewan. Over 60% of refining capacity for battery-grade lithium hydroxide is concentrated in China.
This causes a significant bottleneck for lithium supplies, as it requires shipping the mineral overseas multiple times before it is even ready for battery manufacturing. When material supply chains are imbalanced, it makes extractors, refiners, and manufacturers vulnerable to the slightest disruption in supply. This bottleneck, if not addressed, equates to 350M fewer electric vehicles produced by 2040.
It goes without saying that there is a lot of money to be made from lithium and the products it is used in. Bloomberg New Energy Finance predicts that the global energy storage market will grow 15-fold by 2030, and electric vehicle sales are expected to increase by 35% this year alone. Additionally, increasing refining capacity across Canada could also make mines more intriguing to investors.
The Canadian Cleantech Landscape
About two thirds of Canada’s cleantech companies are located in British Columbia, and Vancouver in particular has become a cleantech hotspot over the past few decades. BC instituted the world’s first carbon tax in 2008 and Vancouver alone is the home to many lithium mining/production/exploration headquarters. Combined with a strong regulatory environment (see Vancouver’s Greenest City Action Plan (GCAP) and 100% Renewable Strategy plans), the city is primed to build up its refining capacity to support the significant lithium reserves in Quebec and Ontario.
There are multiple lithium projects in various states of development in Canada, but permitting regulations and political pushback is keeping capacity growth at a crawl.
Canada’s Role: A New Kind of Lithium Refining
New refining methods can significantly increase Canada’s lithium production capacity. With current refining technology, raw lithium is converted into an intermediate chemical, lithium sulfate or lithium chloride – depending on the feedstock, and then refined into a battery-grade product such as lithium hydroxide (LiOH) or lithium carbonate (Li2CO3).
A new sustainable method of refining already exists in Canada: electrolysis. This process directly converts lithium chloride and lithium sulfate into lithium hydroxide, using less energy and fewer chemical inputs than incumbent refining methods. This technology eliminates the need to dispose of waste lithium sulfate byproducts and can also be utilized with any lithium feedstock, including recycled battery material.
Siting cleaner refining technology in Vancouver and throughout Canada can create a cost-effective, closed loop battery-value chain for not only miners but battery manufacturers as well. This reduces risks of price volatility and material supply issues while decreasing the battery value chain’s carbon footprint.
Encouraging Growth and Innovation
The technological know-how, workforce, and beginnings of regulatory support needed to create a robust lithium supply chain all exist within Canada. Bringing it to its full potential will require more action from both the private and public sector. Mining projects are generally capital and time intensive, with the average project taking 10-16 years to come online depending on regulations and community acceptance.
Although the government has created critical mineral-specific programs, the additional funding and permitting expediency is critical. Hastening the permitting and funding processes should both be top priorities.
Canadian companies should take advantage of the various partnership opportunities available to them, such as through the U.S.’ Inflation Reduction Act and partnerships with other members of the supply chain like battery manufacturers and electric vehicle companies.
Canada also has a highly-skilled demographic of former employees of the fossil fuel industry, whose skills are transferable to the cleantech sector. British Columbia should prioritize skills training and apprenticeship programs available.
Canada is well-positioned to become a global leader in the lithium supply chain. We have an abundance of lithium resources, skilled workers, and the infrastructure needed to support a thriving lithium industry. Now is the time to increase the momentum to fund and deploy projects as quickly as possible to rise to the challenge of the global energy transition.
Dr. Saad Dara is the CEO of Mangrove Lithium.
