The battery sector is synonymous with hope among Quebec promoters of phosphate mining projects – a compound found in a family of lithium-ion batteries. The prices of the material are vigorous, we anticipate demand, but a question mark remains: who will be the donors?
Two companies are particularly active in Saguenay–Lac-Saint-Jean these days. Arianne Phosphate, behind the Lac Paul phosphate mine, has just begun a pre-feasibility study to build a complex for the production of purified phosphoric acid, necessary in the manufacture of lithium-iron-phosphate (LFP) batteries. The other, First Phosphate, is in the drilling phase of a project, 70 kilometers from the deep water port of Saguenay.
Each of these companies still has many steps to take before seeing their project come to fruition. We hope to convince investors.
“It’s several hundred million dollars for the plant,” concedes Raphaël Gaudreault, head of operations at Arianne Phosphate, in a telephone interview. We think we will become even more interesting by being vertically integrated. »
The establishment of a North American battery ecosystem in the hope of counterbalancing China has influenced the company, underlines Mr. Gaudreault. For almost a decade, Arianne Phosphate has been trying to start its Lac Paul phosphate mine project, a complex that would be located approximately 200 kilometers north of Saguenay–Lac-Saint-Jean.
This start-up is still pending, even though the company has received the necessary government authorizations in addition to having gone through the process of the Bureau d’audiences publique sur l’environnement (BAPE). Initially, this US$1.55 billion project focused on the fertilizer niche. At the turn of 2015, the price of a tonne of phosphate began a long downward cycle. It fell below US$100, which was insufficient for the promoter.
The picture is very different today with a price of around US$350 per tonne.
“There was the pandemic, the war in Ukraine and China which reduced its phosphate exports because the country needs it to produce LFP batteries,” says Mr. Gaudreault. We are seeing an opening in the market. Finding one or more financial partners is the component we are working on. »
A purified phosphoric acid (APP) production plant would be built in the Saguenay industrial-port zone. Its annual capacity would be 350,000 tonnes of “battery quality” APP. This capacity could meet “a significant part of Western needs,” says the company. We would also produce phosphoric acid for the fertilizer and animal feed niche.
Reply to China
China produces around 90% of the world’s LFP batteries. This family is gaining popularity as part of the electric shift by automobile manufacturers because they are less expensive to produce. However, their energy storage capacity is lower, which means they need to be recharged more frequently.
According to Benchmark Mineral Intelligence, the automotive sector accounts for approximately 5% of APP demand. This proportion should increase to 24% by 2030, underlines the London firm, in a study released last October.
At First Phosphate, a protocol was concluded as recently as January 25 with American Battery Factory (USA) and Integrals Power Limited (UK) with the aim of producing cathode materials – the positive pole of a battery – for LFP batteries in North America. It was not possible to know where the factory, which could produce up to 40,000 tonnes per year, would be built.
For professor of chemical engineering at Concordia University Karim Zaghib, the Arianne Phosphate and First Phosphate projects are interesting. However, there is a major challenge to overcome, says the man who is considered one of the architects of the Quebec battery industry.
“When we talk about mining projects, we need a lot of money,” explains the professor, who also worked for 25 years at Hydro-Québec. Governments will have to put money in with promoters. Will they support everyone? But LFP batteries represent an interesting niche. They will be useful in energy storage, not just for electric vehicles. »
Despite the excitement surrounding the battery industry, several producers of critical minerals have had headaches over the past year due to falling prices. In the lithium niche, for example, the price of spodumene, which was worth US$7,640 per tonne at the start of 2023, is trading around US$940 per tonne. In this context, Sayona, which produces spodumene in Abitibi-Témiscamingue, is at the heart of a review of its expenses to “ensure the financial viability” of its complex in La Corne.
It remains to be seen whether the strength of the price per tonne of phosphate will allow project promoters to have less trouble.
- The main ore for phosphate, apatite is one of six additions to the list of critical and strategic minerals now considered by Quebec.
Source: Government of Quebec