In the face of this, one question remains on everyone’s mind — where do we find enough lithium to stave off the shortage?
In recent years, Northern Canada has emerged as a new frontier for lithium exploration. Politically and economically stable and with a well-established mining sector, the region has all the right ingredients to support a thriving lithium exploration and development sector. But Northern Canada is not without its challenges, either.
To make informed decisions, investors need to understand both the challenges presented by Northern Canada’s unique climate, the opportunities its mining sector represents and the value of recent lithium spodumene discoveries.
Recent years have seen lithium’s emergence as a lynchpin for both electrification and the clean energy transition. As the core ingredient in many types of rechargeable batteries, lithium is essential for the electric vehicle industry. It’s also used extensively in energy storage systems, which are themselves crucial components for both wind and solar power.
These partnerships will only increase the automotive sector’s influence on the lithium market, which at present is heavily impacted by demand from the electric vehicle and industrial sectors.
For context, hard-rock lithium projects, which host lithium-bearing spodumene pegmatites, typically contains significantly higher lithium concentrations than either brine or clay. Its abundance and high lithium content make spodumene deposits ideal for large-scale lithium production, which is essential for supplying the growing requirements of battery manufacturers and other industries.
It’s not just mineralogy that makes Northern Canada an attractive exploration target. Although mining regulations vary by province, as a whole, Canada is recognized as one of the world’s most stable mining jurisdictions. Many provinces have long histories with the mining industry, which translates to favorable government attitudes and access to a highly skilled workforce.
There’s one other factor at play here, as well. Eeyou Istchee James Bay, which in recent years has been a lithium exploration hotbed in Northern Canada, has largely been claimed. As a result, exploration companies are looking to other areas of Canada’s north to find prospective ground.
Northern Canada is largely characterized by harsh, cold, long winters and subarctic permafrost. Winter temperatures in the area can frequently drop below minus 50 degrees Celsius. Work conditions at mining and exploration projects during the winter can be hazardous to both workers and equipment.
When done correctly and safely, however, exploration work that continues through the winter season can provide companies a competitive advantage over their peers. For one thing, access to winter roads is significantly easier with less activity during the winter season, allowing ease of transport of equipment, materials and personnel to and from a project site. It also enables on-foot exploration and surveying to a much greater extent than would be possible during warmer months.
Working year round rather than suspending operations during winter also provides a considerable advantage for both a company and its shareholders, as it means fewer delays and a shorter timeline for the establishment of a fully operational mine. There is also less risk of upsetting the permafrost layer or causing environmental damage — a big gain for sustainability.
Additionally, a resource company with the capability to conduct exploration activities through the winter will benefit from sustained momentum driven by regular news flow on drill results.
Although much of Northern Canada remains underexplored, there have nevertheless been some incredibly promising lithium discoveries in the region.
Lithium demand has increased exponentially over the past several years, and there is every indication that it will continue to do so. As production struggles to keep pace, we’ve seen the emergence of multiple lithium mining and exploration companies. Many of these organizations are laser-focused on Northern Canada — potentially the site of the next major lithium rush.
Investors would do well to be aware of both these companies and the investment opportunities they represent.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
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