ION Energy Ltd (CVE:ION) CEO Ali Haji has worked in finance with a large investment management company in London, but he likes start-ups as they let him roll up his sleeves and build companies that can create an impact.
The intrepid CEO’s Toronto-based lithium exploration company has its sights set on Central Asia. Armed with one of the largest exploration licenses in Mongolia, ION Energy is poised to become a significant player in Asia’s booming lithium market.
“At 81,000 hectares, it is the largest exploration license ever granted in Mongolia. To be granted such a sizeable land package as a private company speaks to our longstanding relationship with Mongolia and its government,” Haji told Proactive.
Proactive sat down with Haji to learn more about the company’s Baavhai Uul lithium brine project in Mongolia, which is strategically located near China, the world's biggest lithium-ion battery maker.
What inspired a Toronto-based lithium exploration company to take on the far away Baavhai-Uul project in Mongolia?
Timing and opportunity are key and I can certainly say it was the case for ION Energy. In 2017, at the tail end of the last lithium cycle, I was in Mongolia as an advisor to Steppe Gold (TSE:STGO). In local discussions with the Mongolian government, it was clear that there was untapped potential for lithium production in that country. Our team also recognized that the world would soon be ready for the next wave of lithium demand, with the growing adoption of greener, cleaner technologies.
So, ION’s roots are firmly planted in existing in-country expertise in Mongolia, with proven successes and the ability to benefit from strong, trusting Mongolian government partnerships that had already been developed. Over the course of the following two years, ION was awarded the largest land exploration and first lithium brine licence ever granted in Mongolia.
Do you think your project has a location advantage over South American producers?
Absolutely. Our Baavhai Uul lithium brine project is a mere 24 kilometers from the Chinese border. China is the world’s biggest consumer of lithium, the largest producer of electric vehicle batteries and the largest electric vehicle consumer market. China is also building one battery gigafactory per week. They are dominating the global lithium-ion battery supply chain – even the lithium mined in the US, still gets shipped to China for processing.
In the long term, the market is also pushing for local supply chains, in order to improve sustainability and work towards net-zero targets. Significantly, Korea, Taiwan and Japan are battery manufacturers that are close by too. ION Energy couldn’t possibly be in more of a favourable geographic location, and our team is very excited about becoming a major player in the Asian battery supply chain.
Do you think ION has what it takes — local expertise, infrastructure, and management skill — to work successfully in Mongolia?
As I mentioned earlier, when speaking to how ION Energy came to be, our team’s core strength is based on our proven in-country expertise and successes. And we have just added bench strength from a lithium perspective, with Don Hains and Paul Fornazzari. Don is regarded as a global lithium expert, with more than 30 years of experience in exploration and development. He also created the best practice guidelines for lithium brine resources. Paul has a particular expertise in lithium mining over the last two decades, starting with acting as counsel to, and becoming the inaugural chair of the first lithium brine company listed in Canada, Lithium Americas (LAC) and being a director of Neo Lithium (NEO) as well. Their addition is a powerful validation of ION’s long-term strategy and prospects.
Having been awarded the first-ever lithium brine exploration licence in Mongolia has set ION Energy up with a solid ‘first-mover’ advantage. We’re operating in a proven low-cost, year-round production environment. We are also benefiting from the long-term infrastructure investments that Mongolia has made. Mongolia signed onto the Mongolia-Russia-China Economic Corridor in 2016, to promote regional economic integration, infrastructure connectivity, as well as develop trade and investment. Furthermore, the Mongolian government has invested in its national infrastructure by building over 6,000 kilometres of roads and expanding its railway network.
The ION team is very optimistic that we are on the brink of great successes in Mongolia – but don’t just take our word for it, the well-respected expertise that has joined this team, speaks volumes.
What is it like being a foreign investor in Mongolia?
The world needs to pay more attention to Mongolia. Our team recognized the potential for foreign investors, and has benefited from building real trust and strong partnerships locally with the Mongolian government and community groups. Significantly, the Mongolian government has introduced generous corporate tax breaks and policies to make the country an attractive destination for foreign investment.
Does the Foreign Investment Promotion and Protection Agreement (FIPA) with Canada help you all to work in Mongolia?
Canada investors have always been warmly welcomed by Mongolia. Canadian investments in Mongolia’s mining industry are the primary driver of bilateral commercial relations, with Canadian direct investment in the country estimated at around $6.7 billion in 2017. To formalize this synergy, and to show Mongolia’s commitment to Canadian investors, they introduced FIPA in 2017, and our team’s perspective is that we have benefited by operating in a transparent and predictable regulatory environment. This goes well beyond the individual relationships that we have built. From a tangible investment perspective, FIPA has helped to protect investments made by Canadians into Mongolia. Once again, the world and investors need to pay more attention to Mongolia!
Is your project shovel-ready?
We just announced the commencement of our exploration program, that will start with CSAMT testing and will be followed up with a seismic program. ION is committed to a targeted and strategic approach to our auger-led exploration efforts. The company acquired a truck-mounted Auger Rig capable of drilling down to 20 meters and this equipment is on-site. We expect to have detailed exploration updates to share before the end of 2020.
Is ION Energy eyeing any other project?
We will always look at opportunities to acquire additional licences/sites, as part of our aggressive growth strategy.
What are the growth drivers for your company?
The green, clean revolution: I can’t say it enough. It was the primary motivation that pushed forward our vision for ION Energy in 2017. As the global demand for electric vehicles (and its batteries) continues to grow exponentially, so will the demand for lithium. This is being aided by government incentives which have built a vertical integration in the battery metals space unlike anything we’ve seen in the history of mineral mining. Couple this with the improvements in battery range and reduction in cost (CATL lithium iron phosphate Batteries for Tesla Model 3 production in China) and it’s easy to classify this as a revolution, not another cycle. The world is going electric. And, the largest EV consumer base is just 24 kilometres away from ION’s lithium brine site.
You’ve studied computers, worked in high-finance, and are a director with Antler Hill Mining and an advisor to Steppe Gold. With this sort of interesting, all-round background what do you consider the biggest strength you bring to ION Energy?
Thank you for recognizing the diversity of my professional experiences. I have always prided myself in being a multi-dimensional individual. I don’t want to be boxed into one sector, but have sought out opportunities that are in the start-up phase, offer me a significant challenge, so that I can roll-up-my-sleeves and drive the growth strategy while learning new things every step of the way. My ability to thrive in that type of environment and turn them into successful endeavours is exactly what I’m bringing to ION Energy.
Contact the author Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive