Lithium refinery a good fit for Thunder Bay

By Sandi Krasowski,
Local Journalism Initiative Reporter
The Chronicle-Journal

THUNDER BAY, ONT. — Thunder Bay could become the site for a lithium refinery as a result of a partnership with Avalon Advanced Materials Inc. and Essar Group Company, RenJoules International Ltd. 

A binding letter of intent was signed by the two firms this week that will pave the way for Avalon’s plans to establish a regional lithium battery materials supply chain for Ontario and other manufacturers, with Thunder Bay being the refinery site and transportation hub. 

The Separation Rapids site, near Kenora, will be one of the first to provide the initial feed of lithium mineral concentrate for Thunder Bay’s refinery.

In an interview with The Chronicle-Journal on Tuesday, Don Bubar, Avalon president-CEO said, “Yes, it’s going to happen,” but it will take at least a couple of years to be built.

“We have to finalize the details on how it’s going to get built; flow sheet, completion of final feasibility studies and finalizing initial commercial terms — that’s the next steps that we’ll be undertaking with a new partner,” he said, noting that exploration work at the Separation Rapids site and planning has been ongoing for 25 years.

Eric Zakrewski, CEO of the Thunder Bay Community Economic Development Commission, called this a “real positive development” that would be a fairly significant capital investment and construction project for the community, leading to quite a significant number of full-time positions for operating the plant.

“We see it as a really key piece in the province’s critical mineral strategy,” said Zakrewski. “Lithium, not just from the Avalon site, but there are potentially other sites and projects that could feed a facility like that in Thunder Bay. It would be a way for Thunder Bay to really participate in the critical mineral strategy and supply upgraded concentrate to battery manufacturers.”

He said it makes sense to build the plant in Thunder Bay, with its deep water, marine terminals and access to rail and road.

“It makes complete sense to have the raw materials or the ore brought to Thunder Bay for concentrating and upgrading and then shipped out to southern Ontario,” Zakrewski said. “Obviously, there’s a lot of cost advantages rather than shipping all of the material out straight from Northwestern Ontario for processing and upgrading to the GTA, so I think the economics make a ton of sense.”

Bubar agrees.

“Thunder Bay makes so much sense for a regional facility like this because of the excellent transportation infrastructure to be able to access markets for the product, both internationally, domestically and in Northeastern U.S. very easily, and probably at a very relatively low cost compared to other ways,” Bubar said.

Finalizing the exact location in Thunder Bay for the refinery is a work in progress and Bubar says they are looking at several possibilities.

“One of them is the former Ontario Power Generation site now owned by Budget Demolition, who is retained to take down the old buildings there,” he said. “There’s also the Midcontinent Terminal site, which is another possibility.”

Zakrewski says Thunder Bay offers a number of potential sites that are either owned by the City or by the private sector that “fits that bill.”

“We’ve got a number of options, you know, either for purchase or lease that are available,” he said. “We have an employment land study out that’s available through the (Thunder Bay Community Economic Development Commission) on our website that documents the hundreds of acres of industrial land options that are out there. 

“I think Avalon is well down the road of knowing what’s out there and we’re helping to support them with a lot of information.”

Avalon’s lithium project will also create new economic development opportunities for First Nations by taking advantage of lithium resources in traditional territories for lithium mineral concentrate production.

“We first signed a memorandum of understanding with (Wabaseemoong Independent Nations) back in 1999 and we’ve been in dialogue with them ever since,” Bubar said. 

“It’s just a matter of when we can do something there, and now that we’re getting closer to being able to get something started, we’re now in more active conversation. It’s just been slow because of the pandemic. My vision is for them to be an actual business partner.”

Bubar says becoming active business participants could be lucrative for the First Nations economy, especially with these lithium battery material supply chains.

“There are hundreds of lithium pegmatites — the Canadian Shield and lots in Northwestern Ontario — there’s probably at least one in every traditional territory,” he said.

With lithium in high demand for future electric vehicle and battery production, Northwestern Ontario is a key player with multiple deposits in the region.

Current indications on demand for lithium battery materials produced in Ontario reflect an initial production capacity for the Thunder Bay refinery of 20,000 tonnes per year of lithium hydroxide and/or lithium carbonate. 

For this to work, a capital investment of $500 million will be required, which would be jointly funded by Avalon and RenJoules International with additional funding from applicable government programs and other private investors including Indigenous businesses in Northern Ontario.