Essar Group and Avalon Advanced Materials partner to commission $500 million processing plant by 2025 to serve electric vehicle market
Avalon Advanced Materials has found a global financial partner in India to help build a $500 million lithium refinery in Thunder Bay.
After the withdrawal of its first development partnerAvalon, a Toronto-based junior mining company, announced on April 4 that it had signed a binding letter of intent with RenJoules International, a subsidiary of Essar Group.
Essar will become a strategic partner and co-developer to financially support Avalon’s plans to build a regional processing facility to process concentrate from its Kenora area deposit and other northern lithium exploration companies -Western Ontario.
In a press release, Avalon said it expects construction to begin this year at an as-yet-unnamed site in Thunder Bay, which the company said is in the process of finalizing. Provisionally, the plant will enter service in 2025.
Mumbai-based Essar Group is best known in northern Ontario for being the former owner of Algoma Steel in Sault Ste. Married. It is a diversified private international entity with interests in energy, logistics, metals and mining and finance.
Based on projected lithium demand and the growing market for electric vehicles, Avalon expects the refinery’s initial production capacity to be 20,000 tonnes per year of processed lithium hydroxide and/or lithium carbonate.
Lithium is primarily used in the manufacture of lithium-ion batteries used in electric vehicles (EVs).
Avalon said in the release that it expects to tap into various government funding programs to find funds to build the refinery and Aboriginal businesses in Northern Ontario. This is an opportunity for the provincial government to deliver on the commitments made in its recently announced Critical Minerals Strategy.
This proposed refinery will operate under a separate business line called Avalon Lithium Inc. which Essar will become co-owner.
It will be set up to act as a custom processing operation, not only for lithium concentrates from Avalon’s deposit at Separation Rapids, north of Kenora, but also for other potential “budding” lithium producers. in northwestern Ontario.
Avalon did not mention any current agreements with other junior miners in the region.
The company said next steps include finalizing initial commercial terms and completing final feasibility studies for the Thunder Bay refinery and production of lithium mineral concentrate at the Separation Rapids site that will provide initial feed. refinery until other producers join.
In a statement, Avalon President Don Bubar said this is just the first phase of where Northern Ontario can become a national source of much-needed hardware for the next generation. of technologies.
“While the manufacturing of electric vehicles and the production of lithium battery materials may be the initial catalyst for kick-starting critical mineral supply chains in the North, it is only the beginning where the innovation of new products and new efficient processing technologies for other critical minerals such as tantalum, cesium and rare earths, can inspire future growth in other areas of advanced manufacturing, including aerospace technology.”
Essar Power CEO Kush Singh said the partnership is part of its global plans to be part of the transition to green power technologies.
“We truly believe that green energy is the future. This initiative to set up a lithium refinery is a central part of Essar’s overall strategy of investments in the energy transition towards decarbonization with an emphasis on green hydrogen and storage.Lithium is a critical fundamental mineral for the battery supply chain and thanks to the exceptional vision of the Government of Ontario through its Critical Minerals Strategy, we We believe this is the right place and the right time for our strategic partnership with Avalon and other stakeholders.”
In the release, Avalon said this transaction will create economic development opportunities for First Nations to leverage lithium resources in their traditional territories to produce lithium mineral concentrates to be purchased by Avalon Lithium.
Avalon thanked the Ontario division of Invest in Canada for introducing them to Essar last year.