MONTREAL — About 1,000 kilometres from Montreal, in the Precambrian expanse of Quebec’s north, is the world’s second-largest deposit of one of its most sought-after minerals. In 2009, Nemaska Lithium announced its intention to harvest its namesake mineral with all the gut-busting blarney usually reserved for gold rushes and oil strikes. 

To investors, the company touted itself as “your next Canadian lithium supplier,” promising to deliver 300 jobs and $4.1 billion in revenues over its minimum 18-year lifespan. Company president Guy Bourassa draped himself in the Quebec flag. “We will do everything to ensure the control of the company remains in Quebec,” he said. The hubris was understandable. A Quebec-based company, armed with government investment and an abundance of cheap energy, was sitting on a massive reserve of a resource critical to the global shift to electric transit . And Quebec has a centuries-old history of mining its own depths. To mangle a truism, Nemaska Lithium was too good to fail.

And yet fail, it did. Nemaska Lithium filed for creditor protection in December 2019. New York-based Orion Resource Partners, London-based Pallinghurst Group and Investissement Québec bought up Nemaska’s pieces the following August. The transaction, into which the investment arm of the Quebec government will invest up to $95 million, means an end to the old, publicly traded company, leaving some 25,000 small investors in the lurch. What’s more, North American Lithium, which operated a lithium mine in Quebec’s Abitibi region, also received creditor protection in May 2019. The company owed $210 million to its creditors, including $97 million to Investissement Québec. All told, there are five lithium projects in the province, none of which are bringing lithium to market.

There isn’t a straightforward answer as to why Quebec hasn’t yet capitalized on its geological good fortune, as it involves geography, geopolitics, market hype and Canada’s general lack of strategy when it comes to making batteries out of the stuff everyone seems to want. 

At the same time, the province’s governing Coalition Avenir Québec party has promised a roaring return of the lithium industry, offering a vision of provincial actors not only harvesting the hard rock spodumene, but concentrating and upgrading the resulting lithium to make the cells and finally the batteries that are meant to propel us into the future. It will be up to the investor to bet if this is realistic or just more blarney. 

Though Quebec first mined lithium in 1955—for, among other things, ceramics, lubricants and possibly a hydrogen bomb—the metal returned to prominence in the province in 2011, with the “Plan Nord.” Jean Charest, then the scandal–plagued Liberal premier, launched the $80-billion, 25-year plan to wring riches from nearly 1.2 million square kilometres of Quebec hinterland, in part by digging up nickel, cobalt, zinc and other assorted minerals. Nemaska’s Whabouchi mine is one of two the plan listed as potential lithium developments.

Behind the Plan Nord was another truism: Whether hydroelectric power, mass transit or certain ill-fated Olympic flights of fancy, Quebec has long had a hankering for big, expensive, legacy-defining projects. And the hype behind lithium—smartphones! Computers! Electric vehicles!—was extraordinary, fuelled as it was by a certain nationalistic fervor: the belief that Quebec could do with the metal what it had done with hydro power. By 2017, Nemaska Lithium had analysts salivating, with La Presse listing the company’s stock as a hot pick alongside the likes of Alimentation Couche-Tard and Quebecor.

Lost in that fervor was the fact that mining is a highly speculative undertaking, prone to management snafus, cost overruns and market whimsy—or, in the case of Nemaska, all three. When it went bust, Nemaska revealed a $375-million shortfall in its financing and faced a two-year low in lithium prices. “Before I was in government, I remember my hairdresser telling me he bought Nemaska shares,” Pierre Fitzgibbon, Quebec’s minister of economy and innovation, told me. “There were a lot of people who invested in Nemaska who really shouldn’t have. Some sank their entire life savings into it.” (Nemaska Lithium didn’t respond to a request for comment.)

Another problem with lithium—apart from the diabetic spikes in its market value—is that there’s not much money in just pulling it out of the ground. Shipping the stuff from Quebec to the lithium-hungry manufacturing centres of China isn’t worth it. “There is not one mining project or operation in Quebec that is economical right now,” Benoit La Salle told me. La Salle is the the CEO of SRG Mining, a Montreal mining company that submitted its fourth offer to buy up North American Lithium’s assets in April. “The value in lithium is in finished products.” 

To this end—and despite the Liberal government’s green-tinged spiel when it comes to all things electric—the country is a punter when it comes to battery manufacturing. A recent report from Left Coast think-tank Clean Energy Canada pilloried Canada’s lack of refining, chemical-processing and manufacturing capacity, the absence of Canuck-sourced minerals in battery supply chains and the non-existence of commercial-scale battery plants in the country. 

And then there’s geopolitics. There is “worry” about Chinese investment in Quebec lithium projects, Fitzgibbon told me, adding that there is also “a very, very high sensitivity” toward such investment within the federal government. The issue, he says, is China’s virtual stranglehold on much of the lithium market and its government’s ever-expanding sphere of influence. (“We continue to work with our allies and like-minded countries, like the U.S and the EU, to ensure resilient and secure supply chains for the critical minerals that will advance clean technology solutions and build a low emissions future,” said Ian Cameron, press secretary for Minister of Natural Resources Seamus O’Regan.)

The good news? According to the International Energy Agency, demand for lithium will increase more than sevenfold between 2020 and 2030 for electric vehicles and storage alone. And Quebec has oodles of the stuff. So much, Fitzgibbon says, that the province couldn’t possibly process and transform it all on its own. “We couldn’t possibly make all the batteries with the amount of lithium we have,” he told me. Instead of shipping the stuff to China, under the Biden administration’s ambitious new EV plan, Fitzgibbon envisions sending it to the U.S., instead, helping decarbonize the transportation sector much as Hydro-Québec has done with its electricity sales to New York state. 

Let’s just hope Quebec’s next lithium boom isn’t a money-sucking mirage.

Martin Patriquin is The Logic’s Quebec correspondent. He joined in 2019 after 10 years as Quebec bureau chief for Maclean’s. A National Magazine Award winner, he has written for The New York Times, The Guardian, The Walrus, Vice, BuzzFeed and The Globe and Mail, among others. He is also a panelist on CBC’s “Power & Politics.” @MartinPatriquin