Canada's Frontier Lithium has secured the intent of both the federal and Ontario governments to support the development of a lithium conversion facility in Thunder Bay, in a move which is aligned with the country's drive to establish an end-to-end critical minerals supply chain.

The planned facility will process lithium from Frontier’s PAK project into about 20 000 t/y of lithium salts, supporting the production of batteries for about 500 000 electric vehicles a year. The facility is also designed to process materials from other lithium resources, both domestic and international.

Government contributions, which remain subject to customary conditions, aim to cover a significant portion of the expected capital expenditures. Once finalised, contribution agreements will be entered into between Frontier and the respective agencies.

“Today marks a significant milestone in our journey to establish fully integrated lithium operations in north-western Ontario,” said Frontier Lithium president and CEO Trevor Walker. “We are pleased to see support for upstream critical minerals processing comparable to the commitments provided to the downstream manufacturing sector in Ontario.”

The initiative aligns with Canada’s Critical Minerals Strategy and Ontario’s focus on securing domestic supply chains. “Critical minerals are a generational economic opportunity for Canada,” said Natural Resources Minister Jonathan Wilkinson. “Through the Strategic Innovation Fund, Canada is making smart, targeted investments in the most promising projects, helping to ensure we are the global supplier of choice for critical minerals and the technologies they enable.”

Ontario Economic Development Minister Vic Fedeli also welcomed the development, emphasising its role in strengthening Ontario’s workforce and securing domestic supply chains. “Our government is working with Frontier Lithium and the federal government to protect Ontario workers and jobs by mining and refining our critical minerals right here in Ontario,” he stated.

The Thunder Bay facility would be Canada’s first lithium conversion plant, further bolstering North America’s critical minerals ecosystem and reducing reliance on foreign lithium processing. The initiative is a key component of the PAK lithium project, a joint venture between Frontier Lithium (92.5%) and Mitsubishi Corporation (7.5%), which aims to develop North America's highest-grade lithium reserves.

A 2023 prefeasibility study estimated the PAK project’s post-tax net present value at $1.74-billion, with an internal rate of return of 24.1% over a 24-year lifespan. The project supports Canada’s ambition of securing domestic battery supply chains as global demand for critical minerals is expected to double by 2040.

Innovation Minister François-Philippe Champagne highlighted the strategic importance of such projects. “Canada is poised to lead the way in the sustainable production of the critical minerals needed in the new low-carbon economy,” he said. “Critical minerals such as lithium are key to electrifying our transportation ecosystem.”