Federal ministers tour what could be Ontario's first lithium processing plant in Thunder Bay

From the outside, it seems like there isn't much going on at 965 Strathcona Ave. in Thunder Bay, with derelict buildings, rocks and scrap metal strewn across open fields overlooking Lake Superior.

But looks may be deceiving: the property's new owners say the 383-acre site could become the hub of a multi-billion dollar industry in northwestern Ontario. 

Avalon Advanced Materials Inc. purchased the industrial property earlier this year and plans to transform the former Abitibi pulp and paper mill site into Ontario's first lithium processing facility. The plant will process minerals, mined roughly 500 kilometres west, near Kenora, Ont., for use in electric vehicle batteries.

"We've got grand designs to build not just our own processing facility but an industrial parkway that'll house battery recycling and a technology hub as well," said the company's president Zeeshan Syed.

"Part of what we're doing right now in phase one is talking to our commercial partners, to the federal and provincial governments, and just getting this site prepped and ready for that future development."

Industry Minister François-Philippe Champagne came for a site tour Thursday, and called the site "one of the most promising I've ever seen in terms of the possibilities."

Rather than having to develop a brand-new industrial property, or a greenfield, repurposing the brownfield property is more efficient because there's already a deep-sea port and railway line that can be used to bring products to market, Champagne explained.

"Here you have the opportunity to be close to all the markets – the Windsor, Detroit corridor – and at the same time you have a site here which [has] already been in operation for decades," he said.

'Incalculable' economic potential, company claims 

According to Syed, Champagne's excitement isn't an exaggeration.

"The IRA [Inflation Reduction Act] in the U.S. has given an early indication there's been upwards of $90 billion USD invested in clustering around projects like this, so that's our hope," he said.

"It could be more frankly, and really higher in the billions, because it's hard to put a price today on the value of training the workforce of the future."

While the company hasn't revealed when exactly the plant could be up and running, conservative estimates show it could create 500 jobs across Kenora and Thunder Bay.

"It's frankly incalculable right now what the true economic value will be, but we know it's tremendous and it's going to be around for 50 to 100 years," Syed said.

So what does 'incalculable' mean?

It's hard to assign an accurate price tag to minerals beneath the ground. It all has to do with supply and demand, and as the federal government looks to make Canada a key international player in the green economy – the demand is there, said Karl Skogstad, an associate professor at Lakehead University's economics department.

"We know when demand goes up, the price goes up," Skogstad said in an interview with CBC News. "But on the other hand as the price goes up, more and more mining firms set up lithium mines and as supply goes up, price comes down."

"It all depends on the interaction between those two factors, demand and supply, and if you could project that well, you could be a very rich person if you could do it accurately," he said.

While resource extraction may bring limited economic benefits – with workers flying in and out instead of setting up a traditional mining town – a processing facility like Avalon signals more long-term growth, Skogstad said.

"A processing facility like this in Thunder Bay is a lot more permanent and you would have greater economic outcomes from that. You would have people living in Thunder Bay, spending their money in Thunder Bay, you'd have firms setting up to support that processing facility in Thunder Bay," he said. 

Opportunity for reconciliation

With a surge in mining claims across northern Ontario has come opposition from First Nations, including Gull Bay some 175 kilometres north of the city which says it has not consented to thousands of mining claims staked on their traditional territory.

Further north, members of the First Nations Land Defence Alliance have been rallying for their right to free, prior and informed consent when it comes to any mining activity – especially around the lucrative mineral deposit called the Ring of Fire –  that will impact their people.

Syed said working with First Nations communities, especially neighbouring Fort William First Nation, is one of its top priorities.

"There's a lot of grievance of historical mining sector activity that's here – that's a real phenomena. It's not something that we can just hear and walk away from," he said.

"Certainly Fort William First Nation knows Thunder Bay extremely well and it's that partnership and that spirit of partnership that we want to establish."

Chief Michele Solomon of Fort William First Nation told CBC News that Avalon has reached out but at this point, there's been no formal consultation between the company and community. She said she learned of the proposed lithium processing facility the night before it was formally announced.

Members of her community do have concerns with lithium mining and processing, and consultation is vital to address any issues at play, she said.

"Having some more information and some assurances will definitely be necessary to proceed in a good way," Solomon said. "Right now, I would say that that is not where the community is at."

"The process of consultation needs to be respectful. It can't just be simply a box that you check off on a list of things to do. It needs to be more meaningful than that."

Minister of Indigenous Services Patty Hajdu said the plant does have potential to bring economic reconciliation to Indigenous people in the region.

"For too long, Indigenous peoples have been left out of the economic benefits of all kinds of industrial activity or other kinds of economic activity," Hajdu said. "There's an opportunity here because Indigenous people [also have] expertise in how to conduct activity while also protecting the environment for the generations to come."