Anticipated Demand for Battery Minerals Creates Excitement in Québec

In a Canadian province known more for gold and iron ore mining, sources of lithium and graphite are attracting attention

By Steve Fiscor, Editor-in-Chief

Blessed with vast reserves of natural resources, the mining sector plays an important role in Québec’s economy. Gold has been mined for more than a century from the Abitibi region and the area is bustling with activity today. The Labrador Trough that extends from northern Québec into western Labrador is an important source of iron ore. Today those iron ore mining companies are making a shift to accommodate the emerging green steel industry. Soon, several mines in Québec will be producing the metals needed for the green energy transition, such as lithium and graphite.

For the past several years, Québec’s mining industry has made a significant contribution to the provincial economy, and 2021 was no exception, according to the Québec Mining Association (QMA). The $926 million paid in 2021 to the Québec government as mining royalties constitutes a record for the last 10 years. It was a 47% increase compared to 2020 and the QMA believes it highlights the vitality of this key sector of Québec’s economy.

“The QMA is proud to see the mining industry contributing significantly to Québec’s economic growth, the energy transition and the fight against climate change,” said Josée Méthot, president and CEO, QMA. “Mining, more than ever before, is a collective heritage that benefits all Québecers, in particular this year, when mining royalties will help fund a reduction in income tax for individuals.”

According to the information released by the Ministère des Ressources Naturelles et des Forêt, iron and gold mines are the biggest contributors, paying 87% of all mining royalties to the Québec government, followed by 12.5% for the critical and strategic minerals sector. Production of these minerals, which are needed for the energy transition, has increased substantially compared to 2020. Annual graphite production has almost doubled from more than 6,500 metric tons (mt) to more than 12,000 mt, according to the QMA.

What makes the scene even more interesting is that Canada has announced a national critical minerals strategy, from which miners in Québec will likely benefit. For companies considering an investment in a mining and mineral processing operation, Québec offers financial support as well as assistance navigating the permitting process.

Agnico Eagle Consolidates Gold Production in Québec

Pan American Silver recently acquired Yamana Gold (See Leading Developments, p 4). Part of that arrangement included selling Yamana’s Canadian assets to Agnico Eagle Mines Ltd. Agnico Eagle now owns 100% of the Canadian Malartic mine, 100% of the Wasamac project located in the Abitibi region of Québec and several other exploration properties located in Ontario and Manitoba.

Over the last 18 months, Agnico Eagle said it has solidified its presence in the Abitibi gold belt, which stretches from Ontario through northwest Québec. The company already owned the Goldex and LaRonde mines, as well as 50% of Canadian Malartic. Its gold production from the Abitibi gold belt is now forecast to be approximately 1.9 million oz/y to 2.1 million oz/y of gold through 2025.

The Canadian Malartic mine, 25 km west of Val-d’Or, is one of the largest operating gold mines in Canada. The open-pit mine and processing plant built by Osisko Mining Corp. began commercial production in May 2011. In June 2014, Agnico Eagle and Yamana Gold acquired Osisko and created Canadian Malartic GP to own and operate the mine with Agnico Eagle and Yamana each having 50% ownership stake in Canadian Malartic GP.

Agnico Eagle said it has the unique ability to monetize future additional mill capacity at the Canadian Malartic mine, given its extensive operations and strategic land position in the region.

Wasamac is an advanced gold project in northwestern Québec that is located 15 km west-southwest of the mining center of Rouyn-Noranda and approximately 100 km west of the Canadian Malartic Complex. The property contains three past producing gold mines: Wasamac, Francoeur and Arntfield. Agnico Eagle believes it has the potential to be an underground bulk mining operation with production of up to 200,000 oz/y of gold.

Osisko Submits EIA for Windfall

Osisko Mining is developing the Windfall gold deposit, located between Val-d’Or and Chibougamau in the Abitibi region of Québec, Canada. As this edition was going to press, the company had submitted an Environmental Impact Assessment (EIA). The Windfall EIA covered 18 fields of study with extensive details on the project’s tailings facility and water management program. Osisko is planning to set aside $83 million for future closure costs.

“The Windfall EIA submission constitutes a significant milestone in realizing our goal of creating a new producing gold mine in Eeyou Istchee James Bay,” Osisko’s Chairman and CEO, John Burzynski, said. “This submission begins the permitting and authorization process for the Windfall gold project. Osisko enters this process fully aware of the importance of the promoter’s role and responsibilities during the review process.”

Osisko plans to invest $3.5 billion in the Windfall project, developing a world class underground gold mine. To date, they have completed 12.5 km of exploration ramp access to a vertical depth of 635 m, and considerable underground infrastructure, including four ventilation raises, 40 drill bays and a test stope.

Assuming a cut-off grade of 3.5 grams per metric ton (g/mt) of gold, the Windfall resource estimate comprises 811,000 metric tons at 11.4 g/mt of gold (297,000 oz) in the measured mineral resource category, nearly 10.3 million mt at 11.4 g/mt of gold (3,754,000 oz) in the indicated mineral resource category and nearly 12.3 million mt at 8.4 g/mt of gold (3,337,000 oz) in the inferred mineral resource category.

The company recently signed an agreement with Miyuukaa Corp., a corporation of the Cree First Nation of Waswanipi (CFNW), for the construction of proposed transmission lines to transport hydroelectric power to the Windfall project. The power line from the Waswanipi substation to Windfall is located on CFNW traditional lands. Miyuukaa will finance, build, own and operate a 69 kV dedicated transmission line. As an end user, Osisko will pay service fees to Miyuukaa. Construction has already commenced with the hook-up date anticipated in Q1 2024.

Kiena Achieves Commercial Production

Last year, Wesdome Gold Mines Ltd. suffered unscheduled downtime with its underground crusher at the Kiena mine, which is in the Val-d’Or. To make matters worse, supply chain delays put them behind schedule as far as achieving commercial production and ramp development. Toward the end of the year, Wesdome was able to get Kiena on track and they now expect the mine to produce 30,000 to 40,000 oz of gold in 2023.

To facilitate adjacent mining, Kiena’s A-Zone stopes required remediation with paste backfill. A paste fill plant was commissioned during November, and Wesdome declared commercial production at the Kiena mine on December 1, 2022.

“To date, the paste fill plant has performed well, with the focus now primarily on ramp development,” said Warwick Morley-Jepson, interim president and CEO for Wesdome. “Currently ahead of schedule, ramp development in 2023 is designed to provide access to the much wider part of the high grade A zone in early 2024.”

Despite the 2022 headwinds, the mine is excited about the results they are seeing from Kiena’s exploration drilling program, which has been focused primarily on the Deep A zones. Since November, drill results have extended the Kiena Deep A zone 125 m down plunge. The A zone extends continuously from 1,100 m to approximately 2,000 m below surface and remains open at depth. 

“We are pleased with the recent drill results that are continuing to better define and expand the recent discoveries adjacent to the Kiena Deep A Zone,” Morley-Jepson said. “These zones have the potential to increase the number of ounces per vertical meter and to provide additional working faces during mining using the same underground infrastructure used to access the A zone.”

Graphite Mining in Québec

The Lac des Iles (LDI) graphite mine in Québec is the only significant graphite producer in North America, according to Northern Graphite Corp. Located 180 km northwest of Montreal, the LDI mine has been in operation for more than 20 years and will produce up to 15,000 mt/y of graphite concentrate over the next two to three years of remaining reserves.

Northern Graphite plans to expand production and extend the mine life by securing sources of ore from other locations. The company acquired the Mousseau West graphite deposit during October, which is located approximately 80 km from the LDI mine.

The Mousseau West deposit outcrops at the surface making it suitable for open-pit mining operations. The graphite is mainly hosted by calcitic marbles, and Northern Graphite believes, like LDI, any tailings would likely be non-acid generating.

More than 7,500 m of drilling has been carried out on Mousseau West and an inferred resource of 4.1 million mt grading 6.2% graphitic carbon has been defined.  The resource includes 2.7 million mt that have been drilled on 25-m centers.

The company intends to update the resource estimate and complete a Preliminary Economic Assessment (PEA) to evaluate the economics of mining graphite at Mousseau West and trucking it to LDI for processing.

During January, Northern Graphite announced it was working with Graphex Technologies to find a suitable site for the construction of a large-scale graphite processing facility in the Baie-Comeau region. The companies are currently considering a 200,000 mt/y-plant to supply coated spherical graphite anode material to the EV/battery markets in North America and beyond. 

The current supply picture for natural graphite in North America is marked both by a significant shortfall in the availability of non-China-sourced graphite raw material that is needed to meet projected demand, and the complete absence of experienced commercial-scale downstream processing to transform that raw material into battery-grade anode material. 

Developing a New Source of Natural Graphite

Nouveau Monde Graphite (NMG) is working towards developing a fully integrated source of carbon-neutral, battery anode material in Québec, Canada. With high ESG standards, NMG aspires to become a strategic supplier for the growing lithium-ion and fuel cell markets, providing high-performing and reliable advanced materials while promoting sustainability and supply chain traceability.

Eric Desaulniers founded the company 10 years ago, and now serves as president and CEO of NMG. “While much has changed in the last decade, there is still a lag in acknowledging minerals and advanced materials as the cornerstones of the energy transition,” Desaulniers said. “If lithium has garnered much attention and market enthusiasm, graphite — the battery raw material set to have the highest growth in demand — is due for a comparable spike in interest.”

As markets are starting to realize this, the team at NMG is steadily advancing its Phase 1 production capacity at the Matawinie mine and Bécancour battery material plant. Groundwork at the Matawinie site continues as the company prepares for construction. Located along the shore of the St. Lawrence River halfway between Montreal and Québec City, Becancour is emerging as Canada’s battery hub.

As part of its electrification strategy, NMG is working with Caterpillar to equip the mine with an all-electric fleet. The two companies are actively engaged in assessing technology opportunities and planning the zero-emission fleet development and testing for the Matawinie mine.

NMG recently completed and filed a PEA for the Uatnan mining project, which is also located in Québec. The PEA shows strong economics for NMG’s updated operational parameters and production volumes, targeting the production of approximately 500,000 mt/y of graphite concentrate over a 24-year life of mine. The proposed Uatnan project is currently one of the largest projected natural graphite sources being developed in the world.

During October, NMG, Mitsui & Co., Ltd., and Panasonic Energy Co., Ltd., entered into a framework agreement establishing the terms of the commercial relationship between the parties to enable NMG’s next development steps. NMG will use the proceeds to optimize the feasibility study on its integrated commercial operations. The transaction included a non-binding offtake by Panasonic Energy for a significant portion of NMG’s concentrate. In related news, Mitsui, Pallinghurst and Investissement Québec have agreed to issue an unsecured convertible note to NMG for $50 million. Mitsui subscribed for $25 million, and Pallinghurst and Investissement Québec each subscribed for $12.5 million.

Sayona, Piedmont Restart North American Lithium

North American lithium producer Sayona Mining Ltd. and Piedmont Lithium Inc. announced the successful restart of commercial spodumene concentrate production at the jointly-owned North American Lithium (NAL) project in Québec. The $80 million restart of NAL was completed on time and on budget and is the only major source of new spodumene production expected in North America in the next two years. Sayona is targeting 226,000 mt/y of production with first commercial shipments expected in Q3 2023.

Sayona’s Managing Director Brett Lynch commented on the efficient recommencement of NAL. “Since announcing our restart intentions in 2021, our project team has maintained a forward-looking focus to improve lithium capture, achieve more consistent runtimes, and streamline operating costs from the past-producing operation,” Lynch said. “Improvements were made as planned in our timeline and budget, and we are eager to see the impact the upgrades bring to both product quality and operational efficiency as we prepare for our first commercial shipments of spodumene concentrate expected in July of this year.”

NAL is one of three projects of Sayona Québec, a joint venture between Sayona (75%) and Piedmont (25%). Say-
ona is targeting four shipments from NAL totaling up to 120,000 mt by the end of 2023, which are expected to supply key battery and electric vehicle manufacturers, including LG Chem and Tesla.

Powered by renewable hydroelectricity, NAL is ideally located in the Abitibi region of Québec with convenient access to rail, highway, and port infrastructure.

Nemaska Clears Land for Lithium Plant in Bécancour

Nemaska Lithium recently began clearing its site in the Bécancour Industrial Park and Port during January. The company is preparing the land for a lithium hydroxide (LiOH) conversion plant, and construction is scheduled to begin during 2023.

With the aim of becoming the first fully integrated producer of LiOH in Canada, Nemaska Lithium is developing an integrated project for the extraction of spodumene at its Whabouchi mine.

Located in the James Bay territory in northern Québec, the Whabouchi mine is partially built and will continue to be constructed alongside the conversion plant. It’s envisioned as a high-tonnage, hard-rock lithium mining operation. The estimated reserves would support a 33-year mine life. The mine has access to hydroelectric power and an all-weather road. The Cree community of Nemaska supports the project.

Nemaska strongly supports Canada’s new Critical Minerals Strategy, which is designed to take advantage of the generational opportunity for clean, inclusive growth, and become a global leader in critical minerals. 

“Nemaska Lithium applauds the government’s willingness to put in place financial support programs that focus on advancing the critical minerals industry here in Canada,” said Spiro Pippos, CEO, Nemaska Lithium. “With its focus along the value chain, it will support the growth of the entire industry to make Canada a global supplier of choice for the critical materials needed for clean energy and a more sustainable future.”

Bloom Lake Ramps Up Production

Champion Iron Ore, which operates the Bloom Lake mine, in Québec reported record Q4 2022 production of 3 million mt and also confirmed that the mine’s Phase II expansion had reached commercial production.

“The Phase II investments at Bloom Lake should contribute to normalizing operating costs per ton sold as we continue to ramp up the project towards nameplate capacity, which we anticipate achieving in the near term,” Champion’s CEO, David Cataford, said. “Additionally, our commitment to reduce emissions in the steelmaking process continues as we announce the positive findings of the feasibility study which evaluated the further upgrading of Bloom Lake’s iron ore concentrate to a DRPF [Direct Reduction Pellet Feed] quality iron ore product. The project, leveraging the rare purity of our resources, positions our company to participate in the accelerating transition in the steel industry to reduce emissions, and offers the opportunity to generate significant returns on investments while creating additional positive impact with quality jobs for the region.”

Located 13 km north of Fermont, Québec, Bloom Lake’s facilities include a railway from the mine to a loading port in Sept-Îles, Québec.

The Phase II plant demonstrated the ability to achieve nameplate capacity on several days during the period and achieved its commercial production in December 2022. While plant-related upgrades were completed earlier than anticipated, the company said off-site work experienced delays related to labor availability and late delivery of key components. Champion believes that Bloom Lake’s throughput and iron recoveries will benefit from ongoing optimization work programs, mining equipment deliveries, and completion of ore crushing system commissioning, while off-site infrastructure capacity increases are advancing, positioning the mine to achieve its expected increased nameplate capacity in the near term.

Benefiting from high-purity reserves and resources, Champion claims Bloom Lake is one of the few iron-ore deposits in the world capable of upgrading its product to DRPF quality iron ore, which requires an elevated iron content and low impurities. The project, proposing to produce concentrate with 69% iron and a combined silica and alumina content below 1.2%, is expected to produce one of the world’s highest-purity DRPF quality iron ores. This product is a primary ingredient required for the green steel supply chain.

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Got Questions? IQ Has Answers

Investissement Québec (IQ) is a government corporation that has three main roles for the mining sector, attracting foreign investment, supporting mining projects in the form of financing and supporting the development of the Québec government’s battery strategy. “We are putting in place the best environment to foster investment in these projects,” said Jean-François Béland, vice president, Québec Resources for Investissement Québec. “In parallel, we are investing in these projects ourselves. With Champion Iron Ore, for example, we have an equity investment. We also have a 50% stake in Nemaska’s lithium mining operation. These are some of the financial tools we are using to support mining projects.”

Today, there is a high interest in projects related to battery minerals, Béland explained. “Interest in lithium is very high right now,” Béland said. “We also see a great deal of activity in traditional metal mining areas, such as gold, copper, iron ore, diamonds, etc. We have several exploration projects moving forward.”

IQ prefers to get involved with a project during the the beginning of the operations  and permitting process and remains with it all the way through to extraction and mineral processing. IQ offers traditional incentives for developers, such as equity investment and project financing.

Similarly to other parts of Canada and the U.S., the permitting process can be complex. “We have environmental and social assessments that take time, but projects are moving forward,” Béland said. “Québec is a favorable jurisdiction for mining and natural resource development is part of our heritage.”

The new National Strategy for Critical Minerals is clearly setting the framework for the direction we want to go in Québec, Béland explained, “and where we are not supposed to go.” As an example, battery materials and rare earth elements would be an area IQ would support. Even though Québec has uranium, the government of Québec has decided not to move forward in this area. “There is a clear focus as to which projects we want to pursue with a link to the battery strategy,” Béland said.

“We are at the beginning of a new era for mining in Québec,” Béland said. “In a lot of cases, we are starting with battery materials, and quickly developing new natural resources, and doing it with full ESG parameters. It’s a dual approach where we have a new segment developing alongside traditional mining projects.”