Northwest lithium quarry developer taking orders from international customers

The lithium resource industry is starting to gain rapid momentum in northwestern Ontario.

Kenora-area mine developer Avalon Advanced Materials announcing it has secured a “firm commitment” from an undisclosed company to purchase petalite concentrates from the company’s Separation Rapids Lithium Project.

The volume and the specific term on this pending deal, known in mining parlance as an off-take agreement, were not disclosed.

Avalon would only say this is a multi-year agreement with a “major non-Chinese international glass ceramic manufacturer.”

The company calls Separation Rapids a rare pegmatite deposit enriched in the lithium minerals of petalite and lepidolite. Petalite is used to make high strength glass and as a high purity feed to make battery-grade lithium hydroxide. Lepidolite concentrates are also used for production of battery grade lithium carbonate.

The company plans to bring Separation Rapids, 70 kilometres north of Kenora, into small-scale production later this year. The deposit has a 20-year mine life, 

Toronto-based Avalon wants to serve two major customer bases.

It wants to sell northwestern Ontario-quarried lithium product to serve both the high-strength glass and ceramic market and also for the battery cell manufacturers serving the North American electric vehicle (EV) market.

For fast-moving Avalon, this is shaping up to be a second off-take agreement with a major international client.

Last week, Avalon announced it has a pending deal with LG Energy Solution (LGES), a South Korean lithium-ion battery manufacturer seeking to make an aggressive move in the North American EV sector.

LGES could be a major funding partner that gets Avalon’s goal of building a lithium refinery in Thunder Bay by next year. Avalon said it’s already made a purchase offer on an undisclosed piece of industrial brownfield property in the city.

Avalon is confident it can seal the deal with LGES within a few weeks.

In a news release, Avalon mentions there is “considerable interest” from major glass ceramic manufacturers in Europe and Asia. There is a current global shortage of petalite supply ever since China took control of the traditional petalite supply sources in Zimbabwe.

For this latest deal, Avalon notes the agreement is subject to a number of conditions, including the delivery and acceptance of a larger commercial sample of the petalite product. The customer has agreed to initially pay the current market price for the petalite product for at least the first year after commercial shipment commences.

Last year, Avalon extracted a 5,000-tonne bulk sample from its Separation Rapids site and intends to run it through a processing plant to make smaller samples of its petalite product to show to potential customers.

Serving customers in the glass and ceramic market does not need a refining process as Avalon is proposing in Thunder Bay. This milled product from a quarry operation can be shipping directly to the customer.

“While Avalon remains committed to serving the emerging lithium battery materials market in Ontario through its recently announced partnership with LG Energy Solution, Ltd., Avalon is also well positioned to serve both the glass-ceramic and battery materials markets due to the large size of the Big Whopper pegmatite resource and the presence of several other petalite pegmatites on the property,” said Avalon president-CEO Don Bubar in a statement.

“It has been over 20 years since we first tried to serve the glass-ceramics market but it looks like our time has finally come. Lithium has other potential markets as well as a number of other historical applications including in pharmaceutical products to treat manic depression.”