A dormant mining project on the East Arm of Great Slave Lake will be ‘reactivated’ as demand for electric vehicles reignites interest in its metals.

Avalon Advanced Materials announced on Tuesday it believes the Nechalacho project – on Thor Lake, a few kilometres from Great Slave Lake and around 100 km south-east of Yellowknife – could now be turned into a small mine focused on neodymium and praseodymium.

Those two metals are key ingredients of magnets used in electric vehicle motors.

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“The growing market for electric vehicles, especially in China, has created new demand for these high-strength magnets,” read a news release published by Avalon – which noted both metals are now selling for more than $100 per kilogram.

Avalon also said lithium deposits at Thor Lake, which “historically were not considered an economic opportunity … now deserve a more thorough evaluation.”

Lithium is used in electric vehicle batteries, as is cobalt – one of the reasons a separate company, Fortune Minerals, is pushing ahead with its NICO cobalt project near Whatì, soon to benefit from a new, all-season road.

‘Significant advantages’

The Nechalacho project has been inactive for years thanks to a previously quiet market for rare earth elements. In 2015, for example, some prices fell by as much as 50 percent – leading Avalon to conduct almost no work at Nechalacho in both 2016 and 2017.

In the past, Avalon has suggested the cost of turning Nechalacho into a mine would be $1.5 billion, many times the cost of other projects farther south.

However, the company now says it has come up with a plan to mine for neodymium and praseodymium on a smaller scale, incurring fewer costs.

That may mean switching to small open pits instead of the prior plan to mine underground. In its totality, Avalon said the new plan would have “significant advantages … from an environmental standpoint” compared to the old one.

Avalon will spend the rest of 2018 developing that plan by reconfirming the size of the deposits in question, pushing ahead with permitting, and conducting community engagement work.

New infrastructure?

Additionally, the company is putting pressure on the federal and territorial government to get on with funding major infrastructure programs touted in the NWT’s recently announced 2030 Energy Strategy.

If federal funds are forthcoming – the territory says it can’t cover the costs alone – a proposed major power grid expansion would hook up to Nechalacho and allow Avalon to save considerably on money and emissions.

Meanwhile, Avalon is working with the territorial government to study the feasibility, benefits and drawbacks of building a road and hydro connection from the Ingraham Trail to the area of the mine site.

Despite the optimism of Tuesday’s news release, there is no guarantee Avalon’s renewed enthusiasm will actually result in a working mine. If it does, it’s not clear how many jobs the smaller-scale mine would create. Previous, larger-scale plans had come with an estimate of around 300 accompanying jobs.

This November will mark five years since Avalon’s initial plans at Nechalacho received federal approval, prior to the company pulling the plug on construction a year later.


Correction – 8:16am, May 17 2018: One sentence of this article was reworded slightly to make clear that Avalon believes the totality of its new plan, not just the open-pit aspect, has significant environmental advantages compared to the previous, larger proposal. We also corrected the type of mine Fortune Minerals is developing near Whatì – it is a cobalt, not lithium, property.