PDAC 2022: Canada’s long and winding road towards building battery ecosystem

From a lack of skilled professionals to rising costs due to inflation amidst the pressure to quickly build an entirely new industry, Canada must overcome several obstacles before it can build the battery ecosystem it often promotes, industry experts said at a session at this week’s PDAC conference in Toronto.

While the country has over the last year taken steps to support miners hunting for battery metals, which includes a $3.8-billion allocation in this year’s federal budget, none of the session’s industry insiders believed it was possible for Canada to supply battery minerals to cell factories by 2025.

“I can do the graphite for Canada, for the U.S. and whoever is willing to purchase it by 2025,” said Eric Desaulniers, CEO of Nouveau Monde Graphite (TSX-V: NOU; NYSE: NMG), which is targeting its first production from its Matawinie graphite mine, in Saint-Michel-des-Saints, Que., in 2023.

But he added that customers may not be willing to buy graphite if other components needed to make lithium-ion batteries aren’t ready by then. “It’s magic, making a lithium-ion battery cell that won’t explode and that works… very few cell makers are able to do that,” Desaulniers said.

Prices of battery metals such as lithium, nickel and copper have increased in recent years due to high demand for electric vehicles as the world looks to meet its decarbonization goals. Canada can supply most of the critical minerals and also develop an EV industry, but currently lags behind its competitors in China and the U.S., experts say.

The absence of skilled workers needed for this new industry has forced Desaulniers to hire experts from China.

“We don’t need to reinvent the wheel,” said Desaulniers. “The wheel is turning in China. Our challenge is to attract the talent overseas in Canada.” The Nouveau Monde CEO added that two of his engineers are stuck in China due to the coronavirus, which is making a resurgence in the Asian nation and that has forced him to postpone some of his work.

Nascent chemical industry

Colin Hardie, National Director of Mines and Metals with engineering firm BBA Consultants, said that while the industry has plenty of mining experts, the sector is steadily shifting towards “something that’s almost like a chemical industry.”

Often BBA is asked to quickly provide opinions on “new technologies and processes” that are in their infancy, Hardie explained.

“Finding experts in rare earths is rare; there are not many out there,” he said. “We need to have qualified people… most of the people with expertise don’t live in Canada.”

One of the ways Hardie solves issues like that is by partnering with other firms to offer experts for projects.

He also believes that the rising interest in battery metals could change the scenario in the future. While building a steel plant or iron ore mines may not be “so sexy” at the moment, people are interested in critical elements and batteries to “save the planet.”

Members of both the governments present on the panel acknowledged the issue and described it as a problem that persists across the economy.

“(In the mining sector) there will be specific technical challenges, skillset challenges, issues around attracting people to do that kind of work,” said Sheryl Groeneweg, a director general at Innovation Science and Economic Development Canada, adding that there are a “raft of different programs” that have been instituted to address the situation.

According to Merran Smith, founder of Clean Energy Canada, a research firm based at Simon Fraser University, the critical minerals sector can create about 270,000 direct and indirect jobs.

With most minerals being extracted and refined in authoritarian or high-risk jurisdictions such as China and the Democratic Republic of the Congo, Canada’s products are likely to be more attractive in the future, said Smith, however, she believes that the nation runs the risk of doing what it “always does” and continuing to be a staples economy that exports unprocessed goods.

She also stressed the need for “functional conversations” on the increasing demand for electricity to ensure that Canada has “enough electricity to power an electrified society.”

Groeneweg however, said that the government was doing everything it could to “accelerate investment” in batteries and other renewable energy products and expects to see a range of different industrial capabilities and capacities by 2035.

“The government might be perceived as doing nothing, but it’s a bit of an iceberg. There’s a lot going on underneath… there is a lot of companies that’s knocking on our doors… Canada is absolutely open for business, she said.