Canadian lithium's bright new future

A huge opportunity': Alberta oilfields could give rise to lithium
industry fuelled by electric cars

It’s long been known that Alberta’s historic oil and gas-producing Leduc
Reservoir is rich in lithium deposits

Amanda Stephenson,

Calgary Herald

6 January 2020

E3 Metals wouldn’t exist if it weren’t for the work of
Elon Musk.

The natural resources company, which was founded in 2016, has developed
a patented ion-exchange extraction technology that produces purified
lithium concentrate from the light metal that occurs naturally within
the province’s oilfield brines. The company’s goal is to produce
battery-grade lithium hydroxide that can be used in the manufacturing of
lithium-ion batteries — the same type of batteries that power the
electric cars made by Musk’s company, Tesla Inc.

“It wasn’t because of Tesla, but it was because of what Tesla did,” E3’s
president and CEO Chris Doornbos said, on the inspiration for his
company’s technology. “They took a concept, which was an electric
vehicle, and turned it into something that could be a mainstream vehicle
. . . and therein lies an opportunity.”

It’s long been known that Alberta’s historic oil and gas-producing Leduc
Reservoir is rich in lithium deposits, but the exponential growth in
worldwide demand for the light metal is a recent phenomenon. That growth
is driven in part by cellphone batteries, but it’s the rise of the
electric vehicle that’s really driving renewed interest in Alberta’s
as-yet-untapped lithium potential.

While electric cars are still relatively rare in Alberta, they have
already made major inroads in Europe, California and China — and the
growth is only expected to accelerate as battery capabilities improve,
EVs get cheaper and concerns over climate change increase. According to
Bloomberg New Energy Finance, EV sales worldwide are expected to surpass
sales of internal combustion engine vehicles by 2039. The demand for
lithium is forecast to overtake supply as early as 2025.

“Everyone who’s following this space believes that’s going to be the
tipping point,” said Doornbos. “If Alberta really wants to be smart
about looking to the future, and not just doing what we’ve always done,
we need to start building this industry up.”

Most of the world’s lithium is currently produced in Australia, South
America and China using traditional processes such as hard-rock mining
or massive evaporation ponds. Neither method is suited to Alberta’s
climate or geography and both methods have negative environmental
implications. Proponents of a homegrown Alberta lithium industry believe
that — with the development of the right technology — the province could
be a global provider of greener, more economical lithium produced via
repurposed oil and gas infrastructure.

An Alberta lithium industry could also provide employment for laid-off
oil-and-gas workers. E3 — which has secured the lithium and other
mineral rights to more than 1.3 million acres in the Leduc Reservoir
region — hopes to ultimately construct a commercial extraction and
processing facility within the province, something that Doornbos said
could create 300 to 500 full-time jobs. The company hopes to be in
production by 2023, producing 20,000 tonnes of lithium carbonate
equivalent per year with the ability to scale up.

“There’s a huge opportunity to do it here in Alberta, because what you
need is land and a professional skill set,” Doornbos said. “And we have
all of those pieces here.”

The possibility for Canada to become the supplier of choice for a
low-carbon, ethically produced lithium is real, said Jason Switzer,
executive director of the Alberta Clean Technology Industry Alliance.

“Lithium is one of those plays that speaks to Alberta’s strengths. We’re
already pumping a lot of lithium up, we’re just basically putting it
back down the hole right now,” Switzer said. “But we shouldn’t kid
ourselves, it’s a bit of a race to be first. It’s a bit like LNG —
whoever gets there first is going to lock in a market. If you’re second
or third, you may miss that opportunity.”

Another Alberta company working in the lithium space is Summit Nanotech.
The Calgary-based company was founded last year and is currently testing
its own environmentally friendly extraction process that uses
nanotechnology principles to get lithium out of brine water. CEO Amanda
Hall said the company’s target market is the South American lithium
industry, though Alberta could be a secondary market if it gets its own
lithium sector off the ground.

“We have a lot of benefits in Alberta because the wells we would use to
get the lithium out of the ground are already drilled, and the disposal
wells to get rid of the byproducts are already here,” Hall said.
“However, the operation costs and the capital needed to build the actual
refinery for these lithium extraction processes is going to be something
we struggle with. We need as much support as we can get from the oil and
gas industry, and the provincial and federal governments as well.”

Hall added in addition to extracting and refining, proponents of Alberta
lithium dream of the province eventually being home to battery
manufacturing facilities as well, so that the sector does more than just
ship out raw product. But before that can happen, someone is going to
have to prove they have the winning technology that can get the lithium
out of the ground responsibly, sustainably and cheaply.

“That’s the hurdle we all have to overcome,” Hall said. “It’s going to
be a challenge, but it’s like fracking. Shale gas was not economical at
one time either, it just took all that ingenuity to find a way to get at
it.”