PDAC 2018: Energy technology optimism buoys mood at convention
Published: Tuesday, 13 March 2018
The protectionism of US President Donald Trump or the uncertainty of Brexit may overshadow the global minerals industry but optimism was evident at a recent mining and development conference in Canada.
By Daniel Sekulich in Toronto
A more positive outlook was noticeable at the 2018 Prospectors
& Developers Association of Canada (PDAC) convention, trade
show and investors exchange in Toronto.
On the convention floor, in the presentations and at the many
social events that make up PDAC, there was a genuine sense that
the industry is moving ahead towards renewed strength, buoyed
by optimism about growing battery and other renewable energy
This was despite announcements on US steel and aluminium
tariffs and the eighth round of talks aimed at updating the
North American Free Trade Agreement (NAFTA), the potential
demise of which would have serious ramifications for Canadian
"We’re here to focus on concrete steps in moving
forward, not to worry about early morning tweets [from Trump],"
one prospector said.
For PDAC 2018 delegates, growth in the global battery market is
far more important. Lithium, alongside other electric vehicle
and renewable energy markets, "is still the flavour of the
month," observers told Industrial Minerals.
While the number of exhibitors devoted to the sector was not
significantly higher, investors, analysts and other miners
clustered around at booths promoting lithium, graphite, rare
earth elements (REEs) and other energy-related minerals and
"What we’ve noticed with the show is a shift in
interest towards graphite, lithium, cobalt, where it used to be
more gold, silver and those sorts of minerals," Laura Armiento,
head of corporate development with Canadian junior Focus
Graphite Inc, said.
At the exhibit for Oslo-based Nordic Mining ASA, chief
financial officer Lars Grøndahl agreed: "It is a totally
different environment and mood here than what
we’re used to back home. This is our third year at
PDAC, and it is an even better mood this year."
Like many of their competitors, both these firms hope that
increased interest in the green energy sector will translate
into secured partnerships.
For Grøndahl, construction financing is a primary goal
while Nordic develops its projects, which include sourcing
lithium, rutile, garnet and quartz in Scandinavia.
Meanwhile, the target for Ottawa-based Focus Graphite is the
"construction of our mine in northern Québec in the next
six to 12 months, with production in 12 to 18 months," Armiento
Henk Van Alphen, chief executive officer of
Vancouver’s Wealth Minerals Ltd, is slightly
sceptical that all the projects touted will achieve these
short-term goals. But the attention is a sign that much more
money will be hitting the market, he believes.
"This is one of the best PDACs I’ve seen for a
long time" he said. "There’s people actually
wandering around, wanting to give you money. I
didn’t notice that last year."
He also noted a change in interactions with potential
customers, citing a meeting he had with an unnamed European
company that plans to build several operations dedicated to
"This is the first time this has happened to me, whereby you
have battery plants coming to talk to you as a miner," he said.
"We’re a long ways away from lithium production
but they’re already talking to us. I have never
But as with any expansion of demand, there are always parallel
concerns about sustainability. Despite some talk at last
year’s event of a potential lithium bubble,
discussions took on a new urgency at PDAC 2018 thanks to a
Morgan Stanley report released days before the event.
It warned of a potential significant oversupply of lithium,
forecasting it would amount to 190,000 tonnes in 2022, causing
the bank’s researchers to peg projected prices of
the mineral at 45% of earlier predictions.
While reactions to the report varied, those with an interest in
the sector tended to dismiss it.
At a well-attended private reception near the end of the
convention, only one delegate - attending PDAC with an
associate from an international mining-focused private equity
firm - out of around 50 that spoke to Industrial Minerals
concurred with the report’s conclusions.
"I think there’s a lithium bubble so I am cautious
about it," he said on condition of anonymity.
While promoting a graphite project in Madagascar that his firm
is developing Brent Nykoliation, senior vice president for
corporate development at Toronto-based Next Source Materials,
gave a blunt assessment of the green energy market.
"Some of the lithium projects out there? There is going to be a
bubble. Cobalt? There’s going to be a bubble. And
there’s no shortage of graphite. China is drowning
in graphite. But there is a shortage of economic graphite," he
Nykoliation is critical of those who are jumping on the lithium
bandwagon without having enough experience in the sector.
"For instance, people will tell you grade is king. In graphite,
grade is not king. It’s such an opaque market that
you can say whatever you want and no one will say
you’re wrong," he claimed.
While he remains certain that the lithium ion battery market
will take off, Nykoliation thinks it will realistically be
another four or five more years before it does so.
Tyler Dinwoodie, president of Vancouver-based firm Alabama
Graphite Corp, agreed, highlighting a difference in how his
company sees itself. Alabama Graphite has opted to pause the
development of a mine in the US state of Alabama for about five
years and instead focus on dealing with existing low-cost
supplies of graphite.
"We’re not a mining company - we’re a
technology company. I have the mine but I’m not
going to put $30 million into the ground right now.
I’d rather put it into building a factory in the
United States to make American-made, battery-ready graphite,"
Only after the market stabilises will Dinwoodie decide whether
to resume his mining operations.
"You hear all these people saying they want to be in production
by December. It’s a lie. This is just a
promotional ploy by the pumpers of stocks," he claimed.
"Others [here] are pleading for money and we’re
going to have a mine in operation," James Tuer, president of
Vancouver-based Hudson Resources, which is bringing online an
anorthosite project in Greenland.
"We built 50% of it last year and this year we’ll
complete it. There is no other calcium feldspar mine in the
world, and we’ll be shipping material by October,"
While diamonds and gold projects garner the most attention,
industrial minerals firms such as Hudson quietly work on their
projects, away from the limelight, Tuer noted.
And while Hudson can sell all the material produced at the
White Mountain (Qaqortorsuaq) mine to the e-glass industry, it
is looking at additional downstream markets to augment its
"We want to be a green technology company, not just a miner,"
Tuer said. "So, we want to develop new materials. And
that’s a challenge, though not a bad challenge.
That’s the future for us."