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Updated June 2024


What is Lithium

Lithium is considered the lightest of all metals and the lightest solid element under standard conditions. Lithium extraction and processing methods vary depending on the source material:

  • lithium-bearing rocks (e.g., spodumene ore), 
  • clay,
  • seawater, 
  • subsurface brines (i.e., geothermal, oil and gas field brines), and
  • recycled electronics. 

Globally, most lithium is produced by the precipitation of lithium-containing salts from shallow underground brine reservoirs or by rock-hosted mining. In Alberta, lithium is in deep-formation waters often associated with oil and gas reservoirs. Based on current geological knowledge, the areas with the most potential are Devonian-aged carbonate reservoirs in northwestern and central Alberta. The Alberta Geological Survey is currently undertaking a program to expand the publicly available geoscience data for emerging resources, including lithium.

Companies and research groups in Alberta are testing direct lithium extraction (DLE) technology. This technology allows access to Alberta's lithium-brine potential found in existing oil and gas reservoirs, enabling the recovery of lithium concentrate, which is the first step in the value chain.

Batteries for electronics and electric vehicles drive global lithium demand, followed by ceramics and glass. The following figure shows the primary uses of lithium.

Lithium use

Demand for electric vehicles (EVs) powered by lithium-ion batteries is projected to increase. Consumers are incentivized to purchase EVs because of improving battery technology, massive EV production, lower cost of fuel, and more stringent hydrocarbon environmental policies.

Federal and Provincial Critical Minerals Strategy

The federal government has included lithium on Canada's critical mineral list due to its role in economic security and transitioning to a low-carbon economy. Critical minerals are vital to growing Canada's clean, modern economy and are essential for clean technology applications, renewable energy, defence and security technologies, agriculture, and medical applications. In 2022, the federal government released Canada’s $3.8 billion, eight-year Canadian Critical Minerals Strategy to increase domestic extraction and production of lithium and other critical minerals. The federal government has invested in E3 Lithium to advance Canada’s EV battery production through the federal Strategic Innovation Fund Net Zero Accelerator initiative and the Critical Minerals Research, Development and Demonstration Program. Building sustainable infrastructure is also a key component of the Canadian Critical Minerals Strategy. In 2023, the Minister of Energy and Natural Resources announced that the Critical Minerals Infrastructure Fund (CMIF) would begin accepting applications. The CMIF will support the development of infrastructure projects that will enable and grow the sustainable development of critical minerals.

Alberta's Recovery Plan sets out the province’s commitment to establishing a new mineral strategy to leverage its lithium deposits. Alberta’s Mineral Strategy and Action Plan was released in November 2021 and aligns with the federal government’s strategy. The plan was developed with input from stakeholders and Indigenous peoples. The Government of Alberta has expanded the mandate of the Alberta Energy Regulator (AER) to include mineral resource development. The Mineral Resource Development Act establishes the AER as the regulator of mineral resources. Alberta has extensive geological data and expertise to enable the development of Alberta's lithium resources to capitalize on increasing demand. Lithium companies that invest in research and development in Alberta are eligible to apply for the Alberta Innovation Employment Grant, a refundable tax credit. Another financial incentive program is through Alberta Innovates to support research and innovation by providing expertise, services, and funding to postsecondary researchers, entrepreneurs, and industry.

Production in 2023 and Forecast

Currently, there is no commercial lithium production in Alberta. However, E3 Lithium is advancing plans for commercial production of 4.4 thousand tonnes of lithium from 11 producing wells starting in 2026. The production and well forecasts involve weighing the risks based on the likelihood of the project meeting its commercial start date and production capacity. Total lithium production in Alberta is forecast to rise to 13.4 thousand tonnes by 2033 (see Figure S9.4).

Potential uses of lithium in Alberta include industrial applications, such as the chemical production of lithium carbonate and lithium hydroxide, mainly used in manufacturing lithium-ion batteries. 


Several companies in Alberta have announced projects:

  • E3 Lithium commissioned its DLE field pilot plant in Q3 2023 and has completed its initial field tests of the technology. It continues to operate with selected optimized tests producing lithium concentrate for further production testing. 
  • Neolithica will focus on drilling two brine wells in 2024 to perform comprehensive reservoir engineering evaluations. The wells will provide the source of brine needed to conduct the demonstration pilot for the Peace River project. The demonstration pilot is expected to be operational in 2024.

Limitations or Risks to the Outlook

Lithium extraction costs are expected to be lower in the future. Lithium production is expected to become competitive as new extraction methods are developed and proven scalable and processing infrastructure becomes available in the coming years. The economic feasibility of the lithium industry depends on climate change policies, technology development, financial support, and associated risks. Risks include disruptive technologies, concentrated supply chains, and potentially volatile markets. Several actions can be taken to improve lithium economics and reduce investment risks: 

  • Design advanced extractive technologies.
  • Ensure responsible mining and high environmental, social, and corporate governance standards to attract investors.
  • Establish infrastructure and supply chains.

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