Avalon said in a news release that the new refinery would accept future production from its flagship Separation Rapids lithium project near Kenora and be able to take concentrates from other developers of northwest Ontario’s lithium pegmatite resources.
Avalon has established a new subsidiary, Avalon Lithium, in which Essar will become a co-owner.
The next steps entail finalizing initial commercial terms and completing final feasibility studies for both the refinery operations and lithium mineral concentrate production at the Separation Rapids site that will provide the initial feed for the refinery until other new producers also get started. This will also include finalizing the exact location of the refinery.
According to Avalon, the refinery could support 20,000 tonnes per year of lithium hydroxide and/or carbonate production at a capital outlay of about $500 million.
Avalon and Essar plan to fund the refinery’s development jointly, and the partners expect additional funding support from government programs and private investors, including Indigenous businesses in Northern Ontario.
Should construction start this year, the plant could operate by 2025.
Demand for lithium hydroxide and carbonate continues to grow in North America as new electric vehicle and battery manufacturing capacities are established in the U.S. and Canada.
Ontario is now well-positioned to take advantage of the rapid growth with the recent announcement of Ontario’s first-ever Critical Minerals Strategy. Premier Doug Ford described the plan as “the government’s blueprint to connect industries, resources and workers in our province’s north to the future of manufacturing in the south as we build up home-grown supply chains.”
Ontario’s rich endowment in critical minerals in the North uniquely positions the province to establish an integrated supply chain and take advantage of the wall of demand for critical minerals in the economy’s emerging new advanced manufacturing sector.
Avalon president Don Bubar commented that while electric vehicle manufacturing and lithium battery materials production could be the initial catalyst for starting critical minerals supply chains in the North, it was, according to him, just the beginning. “New products and new efficient processing technologies for other critical minerals such as tantalum, cesium, and rare earths, can inspire future growth into other areas of advanced manufacturing, including aerospace technology,” he said.
Avalon shares closed 43.33% higher on Monday at 21.5c per share, giving the company a market capitalization of $82.4 million (US$66 million).
