Australia is in the midst of a lithium mine boom whereas Nemaska will be the first new lithium project in Canada in years, when construction is finished around 2020
This spring, Nemaska Lithium Inc’s chief executive Guy Bourassa returned to Canada from a trip to Asia, jet lagged and tired — and still months away from closing a deal to sell lithium from his company’s planned operations in Quebec to South Korean battery maker LG Chem Ltd.
“It seems to be taking longer than we expected,” Bourassa said in an April interview with the Financial Post. This week, Bourassa finally closed the deal. LG Chem will buy 7,000 tons per year for five years beginning in 2020, when his mine and conversion plant are expected to be operating.
A major stumbling block, he explained in an interview this week, which helped drag negotiations out for six months, was figuring out where to obtain the ‘market’ price for lithium.
In the end, both sides agreed on a formula that considers not only lithium prices in Asia, but also a proposed futures market that the London Metals Exchange plans to launch later this year, third-party reports and even import and export data from various countries.
“Since we started in this field, the main question always is what is the market price — what’s going to be the reference?” said Bourassa. “It differs from one deal to the other, from one country to the other, so it’s a cultural discussion and vision on what is reliable and what is not.”