MGX claims to be the "largest lithium brine land holder in Canada".
CALGARY – A tiny Vancouver-based mining company is betting Alberta’s energy sector could benefit from the rise of electric vehicles by harvesting its oilfield wastewater for lithium carbonate.
MGX Minerals Inc. has been buying up metal and minerals permits in Alberta’s oil and gas producing regions but has no intention of mining the areas for lithium carbonate, which is used to make batteries for electric vehicles.
Instead, Jared Lazerson, MGX’s president and CEO, said the company is working to sign agreements with oil and gas producers to process their wastewater, a byproduct of oil and gas production, so the company can extract the lithium carbonate from that water, which would otherwise simply be treated like waste.
MGX claims to be the “largest lithium brine land holder in Canada” with permits covering over one million barrels per day of brine production by various oil field operators throughout Alberta.
While MGX has yet to deploy a pilot project in the oilfield (a pilot is scheduled to begin in the first quarter of 2017), in December the company signed an agreement with oilsands giant Canadian Natural Resources Ltd. to work on the Sturgeon Lake region, near Grande Praire, Alta.
“Canadian Natural has allowed a third party to obtain water samples from our operations for their work in lithium carbonate,” CNRL spokesperson Julie Woo said in an email. “Beyond that, no decisions, plans or commitments have been made on the application of this technology in Canadian Natural’s operations.”
Lazerson said he hopes that MGX’s technology, for which it has filed patents, will allow oil and gas producers to help supply new energy markets, including the market for electric vehicles.
“Who better to have a big piece of the new energy sector than the energy sector?” he said. “I think there are going to be incredible efficiencies from oil and gas and new ideas as word starts to get out.”
Wood Mackenzie analysts expect lithium demand will double by 2024 as more and more consumers, especially in Europe, purchase electric vehicles.
Lithium prices have spiked in recent years because, as Wood Mackenzie noted in a November report, that lithium ion “has become the technology of choice” for electric vehicles.
The commodity is not traded on any exchange, however, and analysts say that current prices – which have reached US$10,000 per tonne – are likely to fall as new supplies become available.
“The trick isn’t finding lithium, the trick is producing it inexpensively,” Stormcrow Capital president and lithium analyst John Hykawy said in an email.
Hykawy said there are several companies attempting to produce lithium using water treatment technologies like reverse osmosis and nano-filtration but cautioned these are early-stage technologies being developed in a time of high prices.
Most of the lithium carbonate produced in the world is produced in South America’s “lithium triangle,” — the salt flats in Bolivia, Chile and Argentina — where new projects are also set to begin production.
“Prices will fall again, it might take a year or two,” Hykawy said. “But almost none of the smaller companies in the space, with the exception of Orocobre Ltd., are in a position to produce and have their profits benefit from these high prices. By the time most will be able to sell something, prices will be back to lower levels.”
MGX’s Lazerson hopes to move from a pilot project in the first quarter of next year to a full-scale commercial project by the third quarter. MGX, which trades on the alternative Canadian Securities Exchange, has seen its share price rise 110 per cent this year.
The company’s goal, Lazerson said, is to connect its water-treatment units with oil and gas operators in regions where they produce between 12,000 barrels per day to 20,000 bpd.
“Big picture, this is an add-on to oil and gas,” Lazerson said, adding that he thinks energy companies will see the value in the minerals in their waste and venture with MGX to process their water.