Zeeshan Syed claims Avalon Advanced Materials is out to create a “catalytic event” in selecting a site in Thunder Bay to place Ontario’s first proposed lithium processing refinery.
After years of much talk and little action, the Toronto-based junior miner took a great leap forward in June with the announcement that a former forest products mill site in the city’s north end is the spot for a lithium hydroxide conversion plant.
Avalon also introduced a joint venture partnership with Antwerp-headquartered Sibelco, a deal that brings $63-million to the table to bring Separation Rapids, its Kenora-area lithium deposit, into production by late 2025, early 2026.
Refinery production in Thunder Bay looks to start in the fourth quarter of 2027, following a two-year run-up of engineering, procurement, construction and commissioning.
It offers the promise of a combined 500 jobs in Kenora and Thunder Bay.
Now the company is looking to land a second development partner to help make the Thunder Bay lithium plant a reality. Discussions are ongoing.
Avalon experienced a changing of guard this past spring with the retirement of long-time president-CEO Don Bubar and the arrival of Zeeshan Syed and a new management team.
Bubar, a geologist, carved out a 40-year career in the junior mining industry on the project development side, nursing along the Separation Rapids lithium project, outside Kenora, first discovered in 1996.
Syed brings along some executive finesse on the policy and communications side, working in the energy sector in the Alberta government with some time spent in the Prime Minister’s Office in the early 2000s.
In an interview, Syed said Avalon’s message to the market is a “crystal, clear focus” on accelerating their northwestern Ontario lithium properties into production.
Separation Rapids, 70 kilometres north of Kenora, has an established 8.4-million-tonne lithium deposit with open-pit mining potential and a 20-year mine life based on 2018 numbers.
Results from a recent drill program has expanded the size of the deposit, Syed said. A new mineral estimate is due out soon.
Up near Pickle Lake and waiting in the wings is Avalon's Lilypad Project, a lithium, cesium and tantalum property, which Avalon believes has significant upside.
To help bring them into production, Avalon chose Sibelco as a mining partner. The Belgian company brings more than a century's worth of experience in mining and a diverse range of other industries across 30 countries. They'll bring some innovative and leading edge technology to the table and support a sustainability story that Avalon wants to promote, Syed said.
“These guys are not amateurs, they’re not new to this game. They’ve been in mine operations are all over the world.
Avalon wants to serve two markets.
Separation Rapids is a rare pegmatite deposit enriched in the lithium minerals of petalite and lepidolite. Petalite is a type of lithium that’s in demand by the high strength glass and specialty ceramic companies.
The concentrate processed at the mine site can be sold directly to these customers without any chemical upgrading at a refinery. It offers some early stage, upfront cash flow. But Avalon also wants to cater to the North American electric vehicle companies.
There's industry-wide thinking that spodumene is the preferred form of lithium rock for making lithium-ion batteries.
Syed responds petalite "definitely does" convert to lithium hydroxide, and they're out to make that case.
Petalite is not common, it's rare, he said. "Outside of Zimbabwe and China's control, Avalon's got the only known source in the Western world."
Spodumene is lauded for its higher recovery rates on the processing side, but Syed said many of the companies he's talking are interested in substitute strategies.
It seems production timelines to bring spodumene into the supply chain have been overly ambitious and companies downstream are looking at options and alternatives. That's where Avalon enters the picture.
Northwestern Ontario is a rapidly emerging lithium exploration hotbed. There’s an ongoing staking and land acquisition frenzy by a number of aspiring junior players.
But lithium junior miners operate in a different space than precious and base metal exploration companies.
Since no lithium refineries exist in Canada – to convert lithium oxide into an upgraded battery-grade material called lithium hydroxide – it’s on companies like Avalon to bridge that gap and become mid-stream processors.
Much like his predecessor Don Bubar promoted three years ago, Syed said the Thunder Bay refinery can serve as a region processing hub, not just to handle their own feed but material coming from other fledgling producers in the northwest as well. It helps everyone build a better economic case for everyone.
“The whole thesis from the beginning is for this to be a regional facility to help catalyze the entire sector,” said Syed. “There are lots of upstream producers that are trying to come online but are having trouble raising cash or in answering the question of where to send their material to get processed.
“That’s part of the mission we have is to fortify and build the supply chain in general and help aspiring new producers come online.”
The Thunder Bay site is ideal, Syed said.
The former Smurfit-Stone property comes with all the necessary infrastructure they could ask, said Syed, for by way of road, rail and marine access and power connections.
“There’s nothing that’s needed.” he said. ”It’s everything you dream of.”
Bubar suggested in the past that the refinery could be built out in modular fashion, scaling up in production capacity as market demand allows.
Syed said that’s still being considered.
Avalon hasn’t started filling out the order book, but the North American demand for battery-grade lithium is “clearly there” and Syed said their Thunder Bay property offers a “very powerful” value proposition.
“We have a vision of building more than one processing facility and that land can clearly hold that.”
There’s basic engineering, site prep and a feasibility study to do but in terms of production capacity and price tag, Syed said they envision a 22,000-tonne a year lithium hydroxide processing plant with a price tag around US$525 million.
On the environmental side, the Strathcona Avenue has a relatively clean bill of health since Smurfit-Stone closed shop in 2003.
Ministry of Environment, Conservation and Parks spokesperson Lisa Brygidyr said “there are currently no outstanding environmental orders associated with the site,” however there remain existing compliance approvals for industrial sewage, storm water and for a closed waste disposal site. These approvals come with monitoring and reporting obligations by the new owners.
The ministry will familiarize the new ownership on those obligations when contacted, she said.
To help bring it all together, Avalon is looking to joint venture with someone.
No date on when that would happen but Syed mentioned there’s “quite a few parties” that want to team up on the lithium processing side.
For the conversion technology, Syed said they’re working with two European partners on that front and are currently piloting it.
“It’s all about creating very novel IP (innovative process technology application) and lowering that environmental footprint.”
How arduous the government permitting regime might be for the province's first lithium refinery, Syed said those discussions are underway and he's getting "hopeful signals" from Ontario Mines Minister George Pirie, Economic Development Minister Vic Fedeli and Premier Doug Ford's office.
“They understand there’s gotta be a robust, very modern, regulatory system that governs this new growing sector and when it comes to midstream processing facility, it is a catalytic event.”
Syed credits the province for doing a “fantastic job” of attracting and and investing in the carmakers to set up battery technology shops in southwestern Ontario. Now the focus must turn to the upstream side, on the mines in Northern Ontario to feed lithium to the south.
“I’m sure they’ll understand the value in getting this online as soon as we can.
Minister Fedeli has been delivering a series of boilerplate speeches in recent months about Northern Ontario being the “sleeper story” in the EV supply chain with the possibility of two or three lithium processors in the northwest.
Syed is counting on their support.
“They totally understand that the midstream (processing) aspect of the supply chain is the most CAPEX (capital expenditure) intensive, and government needs to be at the table.”
The refinery offers the opportunity to become a training facility. Syed said they're reached out to Confederation College and Lakehead University, and economic development teams in Kenora and Thunder Bay about student and youth employment programs.
“This is an industry that's in the early days so it’s all about the young people and ensuring that we training young people and creating that value here at home.”
Syed noted area First Nations remain significant rights holders and stakeholders that need to be in the picture.
“It’s always been our view that they need more than a meaningful role in this. If we can help support an entrepreneurial role in this, we’re certainly looking at that.”
Syed said he was looking forward to meeting new Fort William First Nation Michele Solomon, council and the community.
“We’ve got lots of ideas and we’re open to all kinds of partnership opportunities.”