Cut Inflation Act like “Building the Hoover Dam” – Snow Lake Lithium CEO
“I wake up every morning and I’m euphoric,” says Philip Gross, CEO of Snow Lake Lithium.
“We are in the right place, with the right resource, the right energy flow, the right logistics and the right infrastructure. All the right parts are there. You have the IRA bill, you have consumers who demand vehicles electric, and we’ve never had so much capital and more deployed mines working toward battery technology than we do today.”
That Gross feels euphoric is hardly surprising. We speak to her on the eve of Snow Lake announcing that it will be able to produce enough lithium to power about 500,000 electric vehicles a year.
Plus, with the Cut Inflation Act offering tax credits to U.S. EV buyers for cars made entirely in North America, it looks like Snow Lake Lithium really is in the right place at the right time.
Get it out of the ground
“We’ve only explored 1% of our property so far,” Gross says.
“We’re just going to grow and grow. 500,000 cars is no small feat because that’s all of North America’s electric car sales last year. But that’s just the tip. from the iceberg.”
When we last spoke with Gross in March, he told us that unless a “transparent” lithium supply chain is secured, the North American auto industry “won’t exist ten years from now.” .
With the Inflation Reduction Act, it seems that the authorities have decided to heed his message.
“When I first read it, I thought it was a little crazy because it’s based on the idea of national sourcing – and national sources don’t exist.
“But after thinking about it, I thought that once every 30 to 40 years, the government should play a role in ensuring that the economy of the next half century is sustainable and creates growth in 30 years on which investors do not focus.
“I liken it to building the Hoover Dam or sending men into space. It didn’t make economic sense at the time but, ultimately, over half a century, it pays off. dividends. It creates jobs, it creates industries, it has a huge economic impact.”
Gross and Snow Lake Lithium are at the top of the list when it comes to meeting this demand and creating a new industry to support the next half century of innovation and mobility.
“Operationally, we’ve really hit our milestones and targets,” he says.
“Most of them we were able to hit prematurely so we’re very happy with everything that’s happening at the site. We’ve exceeded our drilling targets and we’re actually going to be slowing down the drilling at the moment so that we can take a break and do a resource update in the next month.
“Environmental work is ongoing, baseline studies – fish, aquatic species, trees and wildlife – those studies are ongoing and hopefully we can tick that box by the middle of next year. We are still on target for what we hope will be commercial production in 2025.”
From “Granola” to “Luxury”
While Snow Lake Lithium is based in Manitoba, a small Canadian town about 400 miles northwest of Winnipeg, the state capital, Gross currently lives in London. However, despite the gloom that seems to surround the UK economy at the moment, Gross is confident that demand for electric vehicles will not be diminished by rising energy and fuel prices and, on the contrary, cars will continue to be sold and improved.
“What happened is – and it’s an incredible transition – five or ten years ago you were driving an electric vehicle and that was a sign of pure virtue and electric vehicles were pretty much garbage,” Gross says.
“But today it’s a marketing phenomenon. It’s gone from a granola-eating, Birkenstock-wearing crowd to an extremely desirable item. They’ve become a luxury item in the sense that these cars are better today and we’ve reached a point where the savings are at least comparable and they will continue to improve over the combustion engine.”
Even in the face of a potential recession — something Gross isn’t entirely confident will happen — he’s optimistic about the outlook for electric vehicles and, therefore, Snow Lake.
“First of all, I’m not 100% convinced that we’re going to go into a recession in the UK,” he says.
“Maybe I’m just being optimistic. Things are changing very quickly and the financial world is changing at a much faster pace today than ever before in the history of the world. So the pain comes and the pain goes away pretty quickly, especially in smart markets like the UK and US, where they take the pain and then they get back up.
“I get knocked down, but I get back up – what song is it? Who sings it?” he asks.
The song, of course, is Chumbawumba’s 1997 hit “Tub Thumping.”
“Actually, whatever happens in the next six to 12 months, it doesn’t make a difference,” he says.
“We’re bigger, we’re on a longer horizon. The next decade is really what we’re looking at. There might be a bump for a year or two, but it’s only a short-term bump. The real story is that supply and demand are so disconnected today.”
The geopolitics of lithium
“Our number one goal today is to establish ourselves within the ecosystem of the electric vehicle manufacturing supply chain because ultimately the misnomer is that lithium is not a commodity. – it really is a special chemical,” he says.
“If you want to be successful, you have to look at the Chinese model. You have a company like BYD – which most people haven’t heard of, but it’s one of the biggest manufacturers of electric vehicles in the world.
“They own lithium mines in Africa, they are the third largest battery manufacturer in the world, so they control that supply chain. They have been able to control costs, avoid disruptions and control quality. is really important because it is [building batteries] It’s not like making a combustion engine, you really have to have tight control over cost and raw materials to be successful – they’ve achieved that.”
For Gross, following the Chinese model — controlling supply chains and securing access to resources, rather than relying on the free market to distribute fairly — is essential, but not without potential problems.
“There’s always a balance. You can’t have overdependence or total autonomy and globalization is a good thing. I’m not talking about politics, I’m talking about business,” he explains.
“Globalization has been great, it has allowed our economies to really thrive over the past two decades in ways we never dreamed of. We wouldn’t have televisions and cars without globalization.
“But we have to find the balance. That’s my personal view, but I don’t necessarily understand the threat from China – they are a competitor. Russia may be a threat, but China doesn’t is really just a competitor. That’s how I see it. Maybe I’m wrong, maybe China has a threat that I don’t understand, but I consider the competition to be healthy.”
The future certainly looks bright for Snow Lake Lithium. The company is sitting on a lot of lithium, and potentially even more. The IRA bill has incentivized consumers to buy electric vehicles made in North America, which will reduce corporate overhead.
Additionally, Snow Lake’s all-renewable operation will likely see it curry favor with automakers and lawmakers alike.
“The fact that we’re all-electric, all-renewable, with access to rail, and right in the heart of the North American market. I think we’re in the age of electrification and the only way to get there is with lithium. So, yeah, we’re euphoric.”