Just last month, the City of Thunder Bay municipal leaders joined together to discuss the planning of replacing a former pulp and paper mill with a lithium hydroxide conversion facility ¹. The land was purchased by Avalon Advanced Materials, a mineral development company with a focus on clean energy and reducing environmental footprints. The plant is expected to create hundreds of jobs in the area, and to keep up with the demand for lithium electric car batteries throughout North America.
With Northwestern Ontario’s significant amount of geological resources, this region has emerged as a promising location for mineral exploration and development of renewable resources. Lithium mining has progressively become more important due to its vital role in constructing lithium-ion batteries, which are imperative in providing and storing renewable energy, as well as the production of electric car batteries.
According to Zeeshan Syed, the president of Avalon, the lithium will be mined outside of Kenora, Ontario and shipped to Thunder Bay to be processed once the plant is completed. According to early estimates, The plant purchased is expected to create around 550 jobs in the area ¹, creating a higher demand for real estate and rental properties.
Andrew Kane, natural resources business development manager with Thunder Bay’s Community Economic Development Commission, voiced that the plant could possibly lead to other companies building similar operations in the city.
In an interview with CBC news ¹, Andrew Kane stated “The infrastructure for a mine site is a couple hundred million, and the infrastructure for a lithium processing facility is in the hundreds of millions of dollars,” he said. “These jobs are not only good for the local suppliers, but they create construction jobs, but also lasting jobs, good paying jobs.”
“For every job in a mine site, it’s gotta be at least three to four … jobs in support companies as well,” Kane explained.
With Thunder Bay’s access to research institutions, lithium mining presents an opportunity for technological advancements and innovation. Thunder Bay could easily become a focal point for developments related to the extraction and processing of lithium. Universities, mining companies, and other stakeholders could collaborate, leading to the unearthing of economical and environmentally friendly methods of lithium extraction.
According to the Thunder Bay Community Economic Development Commission (CEDC), Approximately 850 Thunder Bay residents work in the mining sector, and 500 Thunder Bay mine service and supply companies support mining ². The largest mine nearest to Thunder Bay is Impala Canada’s Lac des Iles Mine, approximately 85 Kilometers north. The mine focuses on Palladium, a metal said to be 30x more rare than gold, and 15x rarer than platinum and is currently the most expensive of the four major precious metals (silver, gold and platinum. The most notable use of palladium is its use in gasoline vehicle catalytic converters. However, the plant also processes palladium, nickel and copper concentrate in bulk ³.
Thunder bay provides extensive support to the business of the mining industry through access to funding and research facilities, infrastructure and networking. Northern Ontario is home to one of the most significant mineral deposits nationally, called the Ring of Fire, which is an economic opportunity that is believed to be worth $60 billion. As a result, Thunder Bay is consistently welcoming new business professionals as well as their families.
Now that you may understand the importance of these mines, and the minerals produced, you might be asking how this affects property investments in Thunder Bay.
As mentioned, there are currently approximately 1,500 Thunder Bay residents employed in the mining sector. This sector is one infamous for requiring relocation, and week-on-week-off schedules, creating a somewhat unstable lifestyle. This instability of these contract-based career paths can push these employees towards renting. Traveling frequently can make it difficult to be able to take on the time commitment that comes with homeownership, and living in a rental property can make it simpler.
This is similar to the course of action of a property investor hiring a property manager to take over the responsibility and time consumption that comes with taking care of a residential property.
Thunder bay is an excellent city to add to your portfolio, or to begin to build one. Along with the booming mining industry bringing in residents, there are students coming to attend the several post-secondary institutions, including the world renowned Lakehead University, creating a higher demand for rental properties.
Another thing to be taken into account, is the affordability of the city. The cost of living is relatively low in comparison to larger Canadian cities, which drops the real estate prices. This makes thunder bay an ideal place for investors to purchase highly profitable rental properties.
In conclusion, the combination of the growth in the mining sector, the low cost of living and demand for rental properties, Thunder Bay is an excellent city to add to your portfolio of rental properties.