Miners at the Quebec Mineral Exploration Association’s Xplor event in Montreal this week not only are battling the lowest metal prices in 11 years, cutting costs and scratching for capital, they’re coping with a more complicated permit process.
“It’s taking three years or more to complete federal and Quebec clearances, including environmental, sustainability, social requirements and benefits pacts with the native peoples,” said Guy Bourassa, chief executive of Nemaska Lithium Inc.
“It’s a huge and costly challenge for mine finders and developers since you don’t get financing until the permitting process is fully completed,” he said from Quebec City.
Nemaska’s $500-million Whabouchi hardrock lithium project in the James Bay area, 300 kilometres north of Chibougamau, has won full authorization.The ore will go by truck and rail to a new processing plant at Shawinigan and the resulting top-grade lithium carbonate will head for new-generation battery-makers.
“We’ve been lucky with rising lithium prices, contrary to gold, base metals, rare earths, iron ore and most other commodities, and now I’m negotiating the long-term financing needed for Whabouchi’s 2018 start-up,” he added. “Whabouchi’s Plan Nord location is critical … we’ve got the Cree nation’s support.”
Several big Quebec mining projects are shovel-ready, but have been unable to tie up long-term funding during the worst resource-industry crisis in decades. These include the future $1.3-billion Dumont nickel mine in James Bay and phosphate projects in the Saguenay and Sept Îles, together needing $1.5 billion or more. Several Quebec-Labrador iron ore projects have been shut down or are delayed indefinitely.
“This is deeper, longer and tougher than the 2008 global financial crisis when resource funding last dried right up,” said Sean Roosen, the Canadian Malartic mine developer and chief executive of Osisko Gold Royalties Inc., an intermediate gold-focused mining royalty and exploration company.
“Balance sheets have been destroyed, the drillers have laid off half their workers and it’s hard to see a catalyst out there that could turn the commodity markets around quickly.”
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