Lithium carbonate used in battery production, displayed at a mining expo in Shanghai, China, last year.Maxim Shemetov/Reuters
Ottawa is investing up to US$65-million in Canadian lithium processing company Mangrove Water Technologies Ltd. as part of a multibillion-dollar effort to bolster Canada’s critical minerals capabilities and fight back against China’s dominance.
The investment into the company, which calls itself Mangrove Lithium, is being made through Canada Growth Fund Inc., a $15-billion, arm’s-length public investment vehicle. One of the fund’s mandates is to invest in critical minerals technologies that strengthen domestic supply chains for metals used in low-carbon energy.
Privately held Mangrove Lithium, which is based in Delta, B.C., is in the process of scaling up its lithium processing operations. Its recently constructed plant near Vancouver can process enough lithium to power 25,000 electric cars, or between 5 and 10 per cent of the Canadian market. The company plans to build a much bigger plant in either Ontario or Quebec that would produce about 20,000 tonnes of battery-grade material a year, or enough to power 500,000 EVs.
“This funding is going to support operations at our Delta facility,” Mangrove Lithium’s chief executive Saad Dara said in an interview. “But it will also allow us to accelerate the deployment and commercialization of the 20,000-tonnes-a-year plant.”
Mr. Dara co-founded Mangrove Lithium in 2017 using technology developed in work for his PhD from the University of British Columbia.
The company uses an electrochemical refining process that converts unrefined lithium into lithium hydroxide or lithium carbonate, which is used in electric car batteries. The method is cheaper and less environmentally invasive than traditional lithium refining. Instead of using chemicals to extract the metal, Mangrove Lithium uses an electrical current. The technology has been tested in both a pilot and commercial demonstration basis, but not yet proven on a fully ramped-up scale typical of a major global lithium refinery.
Ottawa in its budget late last year launched a $2-billion critical minerals fund aimed at moving mining and mining processing projects of national importance along at a quicker clip.
CGF is one of several federal funding arms alongside Export Development Canada and the Canada Infrastructure Bank that are ramping up investment into Canadian critical minerals companies.
Those funding measures have included loans, equity stakes, stockpiling agreements, price floors and offtakes with mining companies. An offtake is a promise to purchase a certain amount of a mine’s production at a set price.
“Governments are no longer just regulators,” Pierre Gratton, president of The Mining Association of Canada said in an interview. “They are becoming shareholders in the mining sector for economic, energy, and national security reasons.”
Mr. Gratton said that Quebec has led the way provincially, investing heavily in its lithium sector, and now the federal government is following suit with a deluge of much needed funding.
These investments shouldn’t be seen as a subsidy he said, but rather as a necessity to help small mining companies counter unfair market practices by global players such as China.
“Many junior mining projects are begging for federal funding as they are desperate for capital to keep projects moving forward,” Mr. Gratton said.
“Left to the market alone, these projects will not get built. China can flood supply, drive down prices, and keep financing cheap smelting and refining, making new Canadian mines uneconomic.”
Lithium mining and processing is a prime example. China dominates the global supply chain, and Canada for now is only a bit player.
Canada in 2024 produced 4,300 metric tons of lithium, according to the U.S. Geological Survey, compared with 41,000 metric tons coming out of China. One of Canada’s only lithium mines, Tanco in Manitoba, is owned and operated by China’s Sinomine (Hong Kong) Rare Metals Resource Co. The Asian superpower is even stronger in the processing of lithium, controlling about 70 per cent of the global market, according to the International Energy Agency.
Since starting up in late 2022, CGF has made a handful of other investments into critical minerals companies with operations in Canada, including Nouveau Monde Graphite Inc. NOU-T, Foran Mining Corp. FOM-T and Rio Tinto PLC’s RIO-N scandium operation in Quebec.
Yannick Beaudoin, CEO of Canada Growth Fund Investment Management, said in an e-mailed statement that the investment in Mangrove Lithium helps Canadian cleantech companies with breakthrough innovation to significantly expand their output.
“By investing at this critical de‑risking phase – and alongside world‑class investors – we’re helping crowd in more private capital, strengthen Canada’s lithium supply chain, and ensure that home‑grown mining tech IP continues to create jobs and economic value right here in Canada,” he said.
Mangrove Lithium’s CGF financing is part of a bigger US$85-million funding round that includes backing from some of its earlier investors, including Breakthrough Energy Ventures, which was founded by Bill Gates, and BMW i Ventures. The company has raised more than US$150-million to date.