Diane Francis: Alberta on the cusp of another resource boom

·3 min read
Operations At Bald Hill Lithium Mine As Lithium Sector's Newest Exporter Sees No Threat of an Oversupply
Operations At Bald Hill Lithium Mine As Lithium Sector's Newest Exporter Sees No Threat of an Oversupply

The most important date in 20th-century Canadian economic history took place on Feb. 13, 1947, on a farm near Edmonton, when Imperial Oil made one of the largest oil discoveries in the world.

A plume of oil and flames reached 15 metres toward the sky and Leduc No. 1 ushered in Alberta’s incredible oil industry. Within weeks, 500 oil companies were formed, launching Alberta and Canada into the energy big leagues and becoming a major contributor to the Canadian economy and our standard of living.

Now, it appears as though history may repeat itself. Alberta’s Leduc geological formation contains an abundance of lithium, a critical and rare metal that is needed in batteries to power electric vehicles and cellphones.

Lithium has traditionally been extracted from “hard rocks,” but in Alberta, it exists in the brine, or water, left behind in oilfields across the province. Geologist Chris Doornbos started E3 Lithium, a TSX-listed geo-tech company that entered into a strategic partnership with Imperial Oil last year. And last week, the company announced some impressive test results.

“Our resource was upgraded (last week) to 16-million tonnes — 9.6 indicated and 4.6 measured reserves of lithium carbonate equivalent,” said Doornbos in an interview with the Financial Post. “This is five times’ higher than the estimated lithium reserves in the rest of Canada and potentially more than is found in all of North America.”

Like so many other discoveries, Doornbos came across lithium somewhat by accident. “I was looking for copper, but I examined the 2010 Alberta Geological Survey records, then we sampled water from aquifers in the old oilfields and found that lithium was plentiful in the brine water left behind oil production,” he said.

“As such, it is measurable and easily pumped to the surface for processing. It is not mining, but will be conventional oil and gas production. We will drill wells, pump water to the surface, to an extraction plant, then put the water back down.”

Doornbos launched his company in 2016 and called it E3 “because lithium is the third element in the periodic table.” Imperial Oil, which discovered and has produced in the Leduc formation for decades, was a natural partner and now owns a financial stake in the company.

Imperial holds freehold leases in the Leduc area, but E3 has collected drilling rights to a large Leduc land position. “We have everything from Calgary to Edmonton, in the heartland of Alberta,” Doornbos said.

The company, on the strength of inferred reserves, intends to build a commercial processing plant that will process lithium from brine. In 2022, E3 Lithium, with funding from Imperial Oil, built a pilot project that has demonstrated this commercial potential.

Lithium is one of the critical metals and minerals listed by the United States for security purposes. I first came across E3 as a moderator for a panel discussion in Washington, D.C., about critical metals, which was sponsored by the Canada-United States Law Institute.

“There is less risk because we know where it is and how big it is,” said Doornbos. “It’s not uncommon to find this amount of lithium in dissolved formation waters but what’s unique is that these are very well understood aquifers, producing oil since the 1940s, and there have been 4,000 drill holes into Leduc, which means 4,000 geological data points. That’s unheard of. Most take five years to drill their first hole.”

He estimates that the Leduc geologic region encompasses 10 to 15 per cent of the province. There are other lithium deposits in Canada, but most require traditional mining to produce.

“Alberta, if successful, will be its own lithium jurisdiction, paralleling the Lithium Triangle in South America and Australia’s hard-rock lithium mines,” said Doornbos. “Lithium is in demand for batteries because it conducts electricity easier than any other material. It is the lightest metal with the highest energy density.”

Alberta, one the world’s great oil-producing regions, may end up leading the world’s transition to lithium batteries.

Financial Post