Mitsubishi Corporation: Participation in PAK Lithium Project in Canada

TOKYO, Mar 5, 2024 - (JCN Newswire) - Mitsubishi Corporation (“MC”) is pleased to announce that it has entered into a binding agreement with Frontier Lithium Inc. (“Frontier”), a Canadian lithium mining company, to form a new joint venture company (“JV”) dedicated to developing the PAK Lithium Project (“Project”) located in Ontario, Canada. MC will acquire a 7.5% equity interest in the JV in exchange for cash considerations of 25 million CAD (“Strategic Investment”). MC also obtains the right to increase its equity share to 25%.

Since the first drill program that indicated significant lithium potential in 2013, Frontier has continued to conduct exploration activities to increase its resource steadily, and as a result, the Project is expected to have a mine life of over 20 years, with annual production of approximately 20Kt of lithium carbonate equivalent (equating to almost 300K electric vehicles).

MC has decided on this Strategic Investment as its first ever investment in a lithium mine with the view that the Project boasts among the largest and the highest grade lithium resources in North America. Also, Ontario is an active mining jurisdiction that has abundant hydroelectric power, enabling the Project to serve the North American electric vehicles market while minimizing environmental impact. Furthermore, future drilling programs in the substantially large land position that Frontier owns may lead to unveiling further resource potential.

The proceeds from the Strategic Investment will be primarily used to complete the feasibility study of the Project and to prepare for obtaining permits required prior to the commencement of construction. MC will contribute to the development of the Project by sharing the extensive knowledge and expertise in the mining business that it has accumulated over the past decades. The Project aims to commence production of premium spodumene concentrates by 2027 and the production of battery grade chemicals by 2030.

Lithium is essential for electrification and de-carbonization, as it is a critical raw material used in manufacturing lithium-ion batteries for electric vehicles. While mid-to-long-term demand for lithium is expected to grow strongly with the robust demand growth for batteries, there are fears that supply growth may not be able to keep up with such demand. MC believes that the Project can play an important role in addressing these supply-side concerns.

In the "Midterm Corporate Strategy 2024 – Creating MC Shared Value" released in May 2022, MC outlined its growth strategy of accelerating energy transformation, including investment in lithium resources. Beyond this Strategic Investment, MC remains committed to further securing a stable and sustainable supply of battery minerals.