The electric vehicle revolution depends on lithium batteries – and Alberta is one of the few places on earth where large quantities of this metal can be found. Calgary-based E3 Metals Corp has identified the world’s seventh largest lithium resource in the water of the historic Leduc Formation, the site of Alberta’s first oil discovery back in 1947. The Leduc reservoir is over 98 per cent water, which contains a high concentration of dissolved lithium ions. This “petro-lithium” represents a peak potential of $1.8 billion to $2 billion US in gross revenue per year over the next three decades.

THE EV TRANSITION

Every year, more and more electric vehicle (EV) models are coming online. More than a dozen new EV models debuted in 2020 – the same amount is expected in 2021. In fact, Ford recently committed to building five electric vehicles in Canada as part of a deal with auto-worker union Unifor, starting in 2025. The International Energy Agency also forecasts there will be 125 million electric vehicles on the world’s roads by 2030 (presently, there are just over five million).

And every year, we march closer toward price parity. Some forecasters say it will be reached in 2023. Most Original Equipment Manufacturers (OEM) have been building their e-cars based on the model of gas cars, but now they’re starting to build them from the ground up. That makes them much cheaper to manufacture, as do developments in battery technology. The batteries themselves aren’t getting less expensive, but each battery now generates more and more energy.

Perhaps the single biggest stumbling block for many North Americans has been the lack of charging infrastructure. How are you supposed to drive from Calgary to Vancouver with an electric vehicle? Who’s got hours and hours to wait in, say, Revelstoke as you charge your car? What if you run out of juice on the remote Coquihalla Highway, which is notoriously low on service stations?

That problem was finally solved in December 2019, when Petro-Canada finished its “Electric Highway” network of more than 40 rapid-charge stations, mostly along the Trans-Canada Highway between Halifax and Victoria.

NET ZERO EMISSIONS

Chris Doornbos, President and CEO at E3 Metals Corp., states his company’s value proposition is simple: higher purity + less carbon. The company aims to be one of the world’s greenest and most environmentally sustainable producers of battery-grade lithium in terms of land and water use as well as greenhouse gas emissions.

The vision is that E3 Metals’ processing facility will be powered by a natural gas power facility, which could see them using heat from gas turbines to reduce the energy required for other process steps, such as the crystallizers, which will result in an extremely energy-efficient system. The company plans to sequester CO2 into the wastewater stream.

“Our goal is to produce net zero emissions and, if we’re successful, we will change the landscape of mineral production,” said Doornbos.

By comparison, a hard rock lithium mine produces 15 tonnes of emissions per tonne of lithium produced.

The company intends to build a downstream refinery at the production site, dramatically lowering the transportation costs in the product lifecycle. The majority of the world’s lithium batteries are now made in China, Korea, and Japan – but that vector is changing in North America. For example, Volkswagen’s new Chattanooga, Tennessee, factory expansion will include a battery pack assembly facility, and Tesla (the world’s largest consumer of li-ion battery cells) assembles its own batteries at its Sparks, Nevada, plant (from battery cells made on-site by Tesla partner Panasonic). Gigafactory 1, as this facility is known, is the highest-volume battery plant in the world.

A GAME-CHANGING PROJECT

Now named the Clearwater Project, E3 Metals recently conducted its preliminary economic assessment (PEA) and has estimated it will be able to produce 20,000 tonnes of battery-quality lithium hydroxide per year over the next 20 years – that’s 400,000 tonnes over the project’s life.

The Clearwater Project is monumental for the lithium sector, and the first of its kind in terms of scale for Canada, right here in Alberta. After conducting its PEA, E3 announced the project has a pre-tax NPV (Net Present Value) of $1.1 billion US. And there’s a lot of room for growth too. The project has room to scale from the initial 20,000 tonnes per year to 50,000, with even more expansion potential into other project areas too. But, what is so game-changing about the Clearwater Project is the local aspect – local carbon capture that can allow for zero-carbon emission lithium. Once a pipe dream, now a reality.

HOW IT WORKS

Exactly as in oil and gas production, water is pumped out and sent a short distance to a production facility where lithium ions, instead of oil, are absorbed from the water via an ion-exchange sorbent material. The water is then pumped back into the reservoir and a stripping fluid removes the lithium ions to produce a high-grade, high-purity concentrate. Most lithium extraction – for example, what’s done in South America – is performed via an evaporation process. In Australia, they also do some hard rock mining. E3’s proprietary ion exchange direct lithium extraction (DLE) process chemically removes the lithium from the brine, making a high-grade lithium concentrate with over 99 per cent of impurities removed. In the battery market, a price is assigned to your product according to its purity, so E3’s product is expected to fetch a premium price.

The ion exchange process also increases the extraction rate; what might take two years to accomplish in an evaporation pond takes E3 mere hours. With evaporation, the eventual product is concentrated lithium – but it’s also concentrated everything else that was in the water. E3 concentrates the lithium, but none of the other elements; their cleanup step to get it to pure product is a lot smaller, potentially much less expensive, and can be done with very minimal – perhaps zero – carbon emissions.

MADE IN ALBERTA

To develop this project, E3 is using the knowledge, technology, and expertise derived from nearly 70 years of drilling oil in Leduc. The majority of what oil and gas producers have been moving to the surface and then back down again is water, from which the oil and gas is removed. E3 is going to pump the same water from the same reservoir out of a well to a central processing facility, and then pump the water back down. All of the infrastructure, permitting workforce and technology is already present, and is the backbone of the oil and gas industry.

“A real advantage for us is demonstrating this new viable process for removing lithium from the water,” said Doornbos. The infrastructure, the services, the skill set – all of it already exists in Alberta, as does a very mature regulatory body.

“We are making a new commodity, but mirroring what oil and gas does. We have everything here we need to be successful.”

When moving towards a commercial process facility, E3 will hire drilling operators, fabricators, welders, and other specialists – all of whom were once employed by the oil and gas industry.

“We’re turning an after-product into a future-product,” says Doornbos. “Most E3 employees are former oil and gas experts. We also have lithium process expertise. As we grow, the majority of our additional workforce will come from Alberta, from facility engineers to welders. Once in commercial operation, the company is likely to employ around 350 full-time employees, and contractors, not including those required for construction and expansion of our facilities.”

ABANDONMENT ISSUES

There are around 170,000 abandoned oil and gas wells in Alberta and the federal government recently committed $1 billion to the cleanup effort. But, E3 Metals believes there is significant potential in repurposing those oil wells into lithium production, which would reduce the company’s capital expenditure by using existing infrastructure.

CRITICAL MINERALS

On January 9, 2020, Canada and the USA signed the Joint Action Plan on Critical Minerals Collaboration, which recognizes the desirableness of a North American supply chain for a number of key minerals – including lithium – for which both countries currently rely on China. This agreement is meant to advance “our mutual interest in securing supply chains for the critical minerals needed for important manufacturing sectors, including communication technology, aerospace and defence, and clean technology.”

Currently, there is only one lithium producer in North America, which is located in Nevada. A company in Arkansas and another in Saskatchewan are piloting similar lithium extraction technology to E3.

“If everything goes well for us, we might be the first Canadian lithium producer,” said Doornbos. The company is in talks with the Canadian federal government regarding the nation’s strategic mineral plan, as lithium is crucial to so much new technology.

WHAT’S NEXT

E3’s near-future goal is to move the Clearwater Project towards commercial production, focussing its near-term efforts on the dry low emission (DLE) technology for a lithium production plant and, eventually, to build a commercial processing facility. The current benchmark is 20,000 tonnes of Lithium Hydroxide per year by 2024, but Doornbos has his eyes on an eventual number of 150,000 tonnes.

E3 Metals’ proposed lithium extraction project represents a huge economic opportunity for Alberta, with its headquarters in Calgary and the Leduc Aquifer production site approximately 20km from Red Deer. E3’s plans to start production at 20,000 tonnes of lithium a year amounts to approximately $280 million US in gross revenue per year. Over the following 15 or so years, they envision producing 150,000 tonnes a year of lithium hydroxide, amounting to $1.8 billion to $2 billion US in gross revenue per year. That’s the kind of money generated by medium to large oil companies.

Doornbos believes that E3 has the potential to grow into a business of that size, pointing to such companies as Canadian Natural Resources, which grew into a $30 billion company. “We’re taking our product through to the refining step, which is not as common. I would love to see what we start here evolve into cathode or even an entire battery manufacturing ecosystem in Canada.”

“We’re excited to make this a home-grown Alberta story, built on the back of a strong industry, and to provide a key component of growing Canada’s strength in the new-energy mix.”

Are you ready to make moves in Calgary’s tech scene, working with forward-thinking companies like E3 Metals? Head to our Live Tech Love Life careers page and see what opportunities might be out there for you.

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E3 Metals: Powering the green revolution