Allkem Ltd. [AKE-TSX, ASX] said material progress has been achieved in the permitting of its lithium project at James Bay, Quebec, with the recent approval by the Canadian Government.
The James Bay project is owned by Allkem through its Galaxy Lithium (Canada) Inc. subsidiary.
Details about the project are contained in an update of Allkem’s global lithium portfolio business activities and financial position as of December 31, 2022.
The update was released after the close of trading on January 17, 2023, when Allkem shares closed at $11.65. They currently trade in a 52-week range of $14.87 and $7.76.
The Office of the Minister of Environment and Climate Change has announced that the James Bay lithium mine project, located about 100 kilometres east of James Bay and the Eastmain Cree Community in Quebec, may now proceed, subject to oversight through its life cycle.
According to a press release, based on the Environmental Assessment Report, the Minister of Environment and Climate Change Steven Guilbeault, has determined that the project’s environmental mitigation measures provide a sustainable path for the project to proceed.
In the decision statement, Guilbeault set out legally-binding conditions that Galaxy Lithium must comply with throughout the life of the project.
Allkem said the James Bay mine is designed to produce 330,000 tonnes per year of spodumene concentrate utilizing predominantly hydro power over a project life of 19 years.
The proposed operation would include an open-pit mine and concentrator facility, tailings, waste rock, ore and overburden storage areas, as well as related infrastructure.
Meanwhile, Allkem said demand for lithium chemicals and spodumene concentrate continued to be strong in the December quarter with published lithium prices again reaching record highs.
It said electric vehicle sales continued to drive demand with December quarter Chinese EV sales reaching record highs of 2.3 million units, an 82% year-over-year increase. Sales from key European Union countries also posted strong growth at 0.7 million units, up 38% year-over-year during the quarter.
Global sales are forecast at 3.5 million units for the December quarter, and annual sales are expected to reach 10.5 million units, representing 57% growth year over year. Electric vehicle sales growth is expected to remain robust in 2023 given strong order books and potential pent-up demand consensus forecasts for global EV sales indicated sales could reach 14 million units in 2023. Supportive government targets and policies announced globally (including subsidies and tax incentives), continue to ensure strong fundamentals for future growth.
Meanwhile, spot prices for lithium carbonate and hydroxide again set record prices during the quarter as demand outpaced supply. Spot prices in China softened marginally during the second half of December with price reporting agencies reporting declines of less than 10% from their peaks in December.