As he juggles opposition to the Northvolt battery factory project on Montreal's south shore, another stone is falling on Economy Minister Pierre Fitzgibbon's head, impacting the development of the battery sector. Quebec's largest lithium producer, Sayona, is laying off 15 senior employees and reviewing its market strategy.
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The setbacks by the Quebec lithium producer, which is suffering the consequences of the rapid decline in lithium prices, add to worries in the battery sector. However, Minister Fitzgibbon is relying heavily on taxpayer money for this subsidiary.
Sayona blames current conditions in the lithium market for this. The company, a subsidiary of Australia's Sayona Mining, produces lithium, a strategic mineral used in particular to produce lithium-ion batteries for electric vehicles.
But the price of lithium in global markets is in free fall, rising from $61 per kilogram (kg) last March to $12 per kilogram in January 2024.
“Following the rapid decline in the price of lithium, Sayona has had to undertake a corporate restructuring to reassess its overall strategy, refocus its efforts on current operations and exploration activities, while readjusting priorities in the current context. […] Sayona will announce its new strategy in due course,” says Bianca Galimi of Sayona.
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Minister Pierre Fitzgibbon and his entourage were questioned repeatedly by Le Journal on Thursday and remained discreet and did not respond to our queries. The Journal wanted to know whether this new development could help jeopardize the billions of dollars that taxpayers have invested in this project.
Electric car and battery makers, who are investing billions in the power sector, have slowed in recent weeks. The Teslas, Fords and Hondas of the world are putting their weight on the brake pedal these days. The economic slowdown and rising interest rates mean that many drivers prefer to keep their money in their wallets and continue to use their gasoline-powered cars, despite generous subsidies.
Recall that in May 2021, Sayona Québec reached an agreement with Investissement Québec – the financial arm of the Quebec government – to acquire the Lithium North America (LAN) mine in La Corne, in Abitibi-Témiscamingue, at a price of take over 100 million dollars (M$), according to the newspaper Lesaffaires.
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