Automotive News Canada - December 2021 - 12

12
* DECEMBER 2021
Rethinking links in the
battery supply chain
Raw materials are just the
start of Canada's electric
ambitions as companies
bank on the need for
plants close to home
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
LEVERAGING ITS MINERAL
wealth and long automotive history,
Canada is positioning itself to play a
leading role in North America's electric-vehicle
battery supply chain.
But fierce competition and regulatory
hang-ups mean that success is hardly
assured.
China currently accounts for
between 75 and 85 per cent of the
world's capacity for both battery-material
refining and cell
manufacturing, said James
Frith, an analyst who heads
the energy storage team at
researchers BloombergNEF.
But North America is poised
to regain ground as it moves
production back to the continent
throughout the 2020s.
" If you have a supply chain
stretching the length of the
globe, it becomes harder to
fit into [the auto industry's]
just-in-time business model, "
Frith said.
Today, minerals mined in
Canada or the United States
may circle the globe before
returning to the continent as
finished products.
Electra Battery Materials Corp.'s longer-term plans
include construction of an integrated battery-materials
park capable of processing nickel, cobalt and other key
ingredients for production. PHOTO: ISTOCK
as well as several lithium and graphite
projects heading toward production,
said Brendan Marshall, vice-president
of economic and northern affairs at
the Mining Association of Canada. But
the country is currently missing the
value-added steps to get the
materials to battery-grade.
" Canada has a lot of
Frith: Canada's
mines provide
a " little bit of
a head start "
on building a
battery supply
chain.
PHOTO: LINKEDIN
" Nickel can go from the U.S., to
Canada, to Norway, to China and back
to Canada in the form of a battery, "
said Dan Blondal, CEO of Nano One
Materials Corp., a Vancouver-based
battery-technology company.
SIX STEPS TO BATTERY
The complexity of battery production
itself is one of the biggest hurdles
facing Canada's supply chain aspirations,
Blondal said, pointing to six distinct
steps that must take place before
finished battery packs reach vehicle
assembly plants.
Mining, refining and converting
materials to battery-grade are the three
initial hurdles. They're followed by
cathode production, for which Nano
One is developing a new process; cell
manufacturing; and battery assembly.
" If you want to have the whole supply
chain, you've got to bring all that
all into place, " Blondal said.
Canada has a footprint in the key
battery ingredients nickel and cobalt,
strengths, and there's a number
of very positive government
policies in place to try
and advance this, but what
we need is a package deal, "
Marshall said. The industry,
he said, is working to balance
strong demand with federal
permitting processes and
environmental goals.
Pointing to Canada's
nickel industry as an example
of the competing priorities,
Marshall said the supply
chain has the
second-lowest carbon
footprint in the
world. But while the smelting
and refining steps run on
clean power, Canadian mines,
being off the power grid, rely
on diesel fuel. For the industry
to reach its potential,
officials need to build this
dichotomy into the regulatory
approval process, Marshall
said.
MORE MINES NEEDED
investments and how functional our
regulatory environment is, " Marshall
said.
The Canadian opportunities in
cobalt, lithium and graphite are similar,
though the country's mining industry
has less history with each. Still,
Frith said, Canada's active mines give
it a " little bit of a head start " on building
a battery supply chain, trimming
what would have been a 10-year process
to four to six years.
" You have the part of the supply
chain with the longest lead time
already operating, " he said. " You just
now need to focus on the refinery production,
component supply and cell
manufacturing. "
MAKING REFINEMENTS
One Canadian company aiming
to step into the midstream is Electra
Battery Materials Corp. Recently
rebranded from First Cobalt
Corp., the Toronto-based
company is currently recommissioning
a cobalt refinery
in aptly named Cobalt,
Ont., 500 kilometres north of
Toronto.
Blondal: The
The opportunity for mining
expansion is considerable as
EVs supercharge demand. For
Canada to maintain its place
in the global nickel pecking
order, it will need to double its production
capabilities, Marshall said. This
translates into bringing online seven
more nickel mines, a pair of smelters
and one refinery.
Expanding the country's market
share would require even more development.
" Whether
we get there or not is really
contingent on how attractive our
Electra Battery Materials Corp. - formerly First Cobalt Corp.
- is recommissioning a cobalt refinery in Cobalt, Ont.
SUPPLIED PHOTO
complexity
of battery
production is a
major barrier to
Canada's supply
chain ambitions.
SUPPLIED PHOTO
Electra Battery's longer-term
plans include construction
of an integrated
battery materials park capable
of processing nickel,
cobalt and other key ingredients.
Ontario's
clean-power grid
and the company's proximity
to the automotive heartlands
of Canada and the United
States give Electra an advantage,
said company President
Trent Mell.
" If you look at the carbon footprint
of a domestic supply chain, you're
going to far exceed anything coming
out of Korea [and] Japan, which is the
preferred market right now for the big
American [automakers], " Mell said.
One risk for Canada, Frith said,
is stumbling along the same route
as Australia and fulfilling only the
resource part of the equation.
" They've really been China's mine
over the last decade when it comes to
lithium battery materials, " he said.
Recent auto-supply-chain problems
and government policies have
refocused the United States on building
domestic battery production. This
means Canada will have a ready market
for its raw materials. But to prevent
all the higher-value manufacturing
from going south of the border,
Canada must build out its own processing
capabilities.
BRINGING IT ALL TOGETHER
Likewise, Canada needs to address
the specifics of a homegrown battery
industry, said Matthew Fortier, president
of newly formed EV-supply-chain
alliance Accelerate.
" That coherency and that purposefulness
have not been there yet,
whereas other jurisdictions have been
purposeful - you know, you look at
Europe, you look at Asia. "
Accelerate - whose members
include Unifor, the Automotive Parts
Manufacturers' Association (APMA)
and Quebec-based bus maker Lion
Electric - plans to get the disparate
mining and manufacturing
industries
on the same page
and work with governments
to create
the right conditions
for the supply chain
to flourish, Fortier
said.
Top government
officials in Ontario
have already been
pushing hard to
anchor the province's
battery supply
chain with a
battery plant. In
November, Premier
Marshall:
Canada has to
double its nickel
production
capabilities.
SUPPLIED PHOTO
Doug Ford pulled back the curtain on
the next phase of Ontario's auto strategy,
which included the goal of landing
two or three such plants.
Vic Fedeli, Ontario minister of economic
development, job creation and
trade, told Automotive News Canada
that discussions were ongoing between
Ontario and a dozen battery makers
in November. But no deals have been
struck to date.
" I hope we have really positive
results from all of the elbow grease the
team has put into this, " Fedeli said.
The battery plants would supply
Ontario vehicle assembly plants - four
of which are already or are soon to be
building EVs.
In Quebec, a pair of battery-cell
manufacturing plants have been
announced but remain in the early
planning stages. The Lion Electric Co.,
meanwhile, broke ground on a battery
assembly plant outside Montreal in
June.
As EV uptake accelerates,
Bloomberg's Frith expects the battery
supply chain in Canada and the
United States to move quickly to keep
up. He could not break out standalone
Canadian figures but said North
America's share of commissioned global
battery production is likely to reach 15
to 20 per cent by 2025. - ANC
Automotive News Canada - December 2021

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