Piedmont poised to start supplying Tesla, LG Chem with critical minerals from Canada
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Mar 3, 2023
Mehanaz Yakub

Production of spodumene concentrate is set to begin this month at the North American Lithium mine in Quebec, enabling Piedmont, one of the mine’s owners, to begin delivering on recent supply deals with LG Chem and Tesla

The restart of spodumene production at NAL is “on track” for production by late March 2023, says a Sayona company spokesperson in an email to Electric Autonomy. Photo: Sayona Mining

Production of spodumene concentrate is set to begin this month at the North American Lithium mine in Quebec, enabling Piedmont, one of the mine’s owners, to begin delivering on recent supply deals with LG Chem and Tesla

Piedmont Lithium, a minority partner in the North American Lithium (NAL) project in Quebec’s Abitibi-Témiscamingue region, started 2023 with a pair of high-profile agreements to supply spodumene concentrate (lithium ore) from NAL to Tesla and, most recently, LG Chem.

Now a spokesperson for Piedmont’s majority partner in NAL, Sayona Mining Ltd., has confirmed to Electric Autonomy that NAL is “on track” to begin production later this month.

When it does, NAL will be the only active producer of lithium concentrate in Canada. As well, it will be a “leading producer of spodumene concentrate in North America,” says a spokesperson for Sayona.

Sayona Mining’s headquarters are in Australia while Piedmont hails from North Carolina. The two companies share ownership of the NAL project via a joint venture called Sayona Quebec. Sayona holds a majority 75 per cent stake.

Piedmont and Sayona have been working to restart operations at the Quebec mine, in La Corne township, since last summer. The final permit outstanding for the go-ahead came through from the federal Department of Fisheries and Oceans in late December.

Piedmont’s first commitments

Under the terms of the Sayona Quebec joint venture, Piedmont may purchase the greater of 113,000 metric tons of spodumene concentrate (also known as SC6) per year or 50 per cent of NAL’s SC6 production.

Thus far, Piedmont’s combined commitments to Telsa and LG Chem from that production add up to a minimum of 325,000 metric tons over the next three to four years.

Under the terms of the LG Chem deal, announced in late February, Piedmont will supply the chemical company with a total of 200,000 metric tons of spodumene concentrate over four years (50,000 per year). Shipments are expected to start in the third quarter of this year.

The deal is notable for another reason too. The South Korean chemical company is also spending US$75 million to purchase a 5.7 per cent stake in Piedmont.

“We welcome LG Chem as a shareholder in Piedmont and are excited to partner with them to supply North American lithium,” said Piedmont president and CEO, Keith Phillips, in a press statement announcing the deal.

LG Chem says it will use the SC6 to support its plans to produce cathode materials for North American customers. That will help it meet the requirements of the 2022 Inflation Reduction Act.

Piedmont is also giving LG Chem priority negotiation rights for 10,000 metric tons per year of lithium hydroxide produced at either of its facilities in Tennessee or North Carolina.

“As we work to build various partnerships, including joint metal investments with automotive OEMs and battery makers, we’re pleased that our partnership with and commitment of funds to Piedmont will help support its development of lithium projects,” said Hak-Cheol Shin, vice chairman and CEO of LG Chem.

Tesla deal amended

Piedmont’s latest agreement with Tesla, announced in early January, is actually an amendment to an earlier spodumene concentrate supply deal signed in 2020. That deal stipulated Tesla would receive spodumene from Piedmont’s North Carolina deposit. However, due to delays with that mine’s operations and delivery postponements, the agreement needed amending.

Accordingly, Piedmont will now supply 125,000 metric tons of spodumene concentrate to Tesla from its NAL mine.

Deliveries will start in late 2023 and go until the end of 2025. There is also an option to extend the contract for another three years.

“We are pleased to be able to partner with Tesla to supply lithium resources produced in North America,” said Phillips in a press release announcing the amended agreement.

“The electric vehicle and critical battery materials landscape has changed significantly since 2020 and this agreement reflects the importance of — and growing demand for — a North American lithium supply chain. This agreement helps to ensure that these critical resources from Quebec remain in North America.”

Progress and future plans

So far, good progress is underway with the resumption of spodumene production at NAL. Advancements are happening on time and within budget, says Sayona.

Approximately $100 million has gone into restarting the project. A significant amount of the money went towards equipment upgrades. These will improve the operational efficiency and production of SC6 at the mine.

In January, Sayona conducted a trial to process 400 tonnes of spodumene ore into a crushing plant. Each part of the crushing process was checked and tested successfully by NAL’s operational and maintenance teams and contractors.

Then, last month, the project teams successfully conducted a start-up test of the process operations at NAL. This processing start-up comprised the circulation of spodumene ore into the crushing plant all the way through to the sorting, grinding and separation systems.

Sayona expects to ship its first production of spodumene concentrate from NAL by July 2023. Four additional shipments are planned for the first half of 2024. During this time, the target is to produce a total of 85,000 tonnes to 115,000 tonnes of spodumene concentrate.

Expanding operations

Sayona also has plans to develop downstream processing options at NAL. Along with Piedmont, Sayona is examining options for lithium carbonate or lithium hydroxide in Quebec.

Under its joint venture, Sayona Quebec, a pre-feasibility study was launched. It looks into the production of lithium carbonate from spodumene produced at NAL.

“Ultimately Sayona has committed to going downstream in Quebec through the production of lithium carbonate or hydroxide, which would further value-add and enhance Quebec’s goal of developing its own battery chain, from mining to processing to manufacturing, supplying battery and EV makers in Canada and the United States,” says the Sayona spokesperson.

Once NAL restarts and production of spodumene begins, Sayona is ready to turn Quebec into a significant lithium production hub.

In the Abitibi region, where NAL is located, Sayona Quebec also owns Authier Lithium, another hard rock spodumene lithium deposit 30 km from the NAL, and Tansim, an open-pit lithium mine, 80 km southwest of Authier.

Meanwhile, Sayona Mining owns 100 per cent of the nearby Moblan Lithium Project and Lac Albert project, located farther north in the James Bay area.

These assets combined create the largest lithium (spodumene) resource base in North America, says Sayona.

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