Avalon Advanced Materials Inc. (TSX: AVL) (OTCQB: AVLNF) has acquired an industrial site in Thunder Bay to develop a lithium-hydroxide processing plant, which it says is a critical step in its mission to become Ontario’s first vertically integrated lithium producer.
The Toronto-based company announced the site’s acquisition on Monday, which is expected to create 500 jobs in Thunder Bay, Kenora and the surrounding area upon completion and create economic opportunities for First Nations communities in the area.
Avalon says the site will be ideal for the plant’s construction because of its pre-existing rail, road, deep-water port and utility infrastructure. The company thinks the plant will enable broader development of northwestern Ontario’s lithium assets by producers that can benefit from close proximity to it.
Additionally, Avalon says it will help the provincial and federal governments achieve their objective of securing domestic infrastructure with a long-term lithium processing capacity capable of catering to North America’s electric vehicle and battery supply chain.
“Thunder Bay has long served as a strategic port for Canadian industry, facilitating trade between Ontario’s north and the rest of North America. We’re thrilled to be partnering with Avalon to continue that tradition while bringing jobs and new economic opportunities to the region,” said Ken Boshcoff, Mayor of Thunder Bay.
Read more: Champion Electric Metals surveys lithium and base metal targets in Quebec
Read more: Sigma Lithium CEO to discuss ‘Green Brazil’ with President Lula
As part of the project’s development, Avalon plans to create a research and development hub in partnership with an unnamed local university and college stakeholders and ideally discover novel domestic intellectual property.
The company wants to reduce carbon emissions by connecting the lithium assets of producers in Ontario’s north with the nearby processing facility rather than shipping their material overseas.
The news comes as the United States has had more than US$40 billion invested in the battery supply chain following the Inflation Reduction Act being passed by the country last summer to help promote clean energy and reduce carbon emissions among other things.
It also follows Avalon receiving an investment from Belgium’s SCR Sibelco NV valued at approximately $63 million last week, an agreement also intended to help Avalon become vertically integrated. Sibelco received 109.7 million shares of Avalon through the deal, representing about 20 per cent of its common stock.
The funding will be used by Avalon to forward its lithium production and processing goals across its lithium portfolio. The company’s primary asset is the Separation Rapids lithium project near Kenora.
“We are proud to contribute and support Avalon through Sibelco’s focus on development of the lithium mine JV with the aim to expand the mineral resource and develop the mining operations to meet the needs of the downstream markets in both technical glass and ceramics and the Avalon refinery project,” said Sibelco’s CEO Hilmar Rode.
Other lithium companies operating in Northern Ontario include Frontier Lithium (TSX-V: FL) (OTCQX: LITOF), owner of the PAK Lithium Project and Ultra Lithium Inc. (TSX-V: ULT), owner of the Georgia Lake Lithium Pegmatites and Forgan Lake Lithium Pegmatites projects.
Avalon shares rose by 6.67 per cent Monday to $0.16 on the Toronto Stock Exchange.
rowan@mugglehead.com
