The Future of Mining: A Look into Honda’s Electric Vehicle Plant in Canada

January 11, 2024

Honda Motor Co Ltd.

by James Hyland, MiningIR

The global automotive industry is undergoing a significant transformation as automakers increasingly focus on electric vehicles (EVs) to reduce carbon emissions and meet the growing demand for sustainable transportation. Honda Motor Co Ltd., one of Japan’s leading automakers, is contemplating a substantial investment in Canada to build an electric vehicle plant as part of a multi-trillion yen project. This venture could have profound implications for the mining industry, particularly for lithium and graphite, which are essential components of EV batteries. In this article, we will delve into the potential impact of Honda’s project on the mining sector, with a particular focus on lithium and graphite mining. Additionally, we will discuss two companies, Recharge Resources and Lomiko Metals, that play vital roles in this evolving landscape.

Honda is considering investing nearly 2 trillion yen (approximately $13.83 billion) in building an electric vehicle plant in Canada. This project is seen as one of Honda’s most substantial investments to date, indicating its commitment to catching up in the electric vehicle market. Honda has been somewhat slow to embrace electric vehicles, with battery-powered vehicles accounting for less than 0.5% of the company’s worldwide sales during the first nine months of 2023. However, the announcement of this project signals a significant shift in strategy.

2024 Honda Prologue Electric Crossover

The Japanese automaker is exploring various potential sites for the new plant, including the possibility of locating it next to an existing automobile factory in Ontario. Honda expects to make a final decision by the end of the year, and if all goes as planned, production at the new facility could commence as early as 2028. This move aligns with Honda’s goal to begin production and sales of electric vehicles in North America by 2026, based on its new Honda e:Architecture. The automaker, with partner LG Energy Solution, in 2022 announced Ohio as the site of a planned $4.4 billion joint-venture battery plant.

Honda’s ambitious project could have a profound impact on the mining sector, especially concerning the extraction of lithium and graphite. These two minerals are critical components of lithium-ion batteries, which power electric vehicles.

Lithium is a fundamental element in EV batteries, as it enables the efficient storage and release of electrical energy. With the global shift toward electric mobility, the demand for lithium has been steadily increasing. Honda’s investment in electric vehicle production in Canada would likely lead to a surge in lithium demand, potentially necessitating increased exploration and mining activities in countries with lithium deposits.

Graphite is another essential component of lithium-ion batteries, used in the anodes to store and release electrical energy. As Honda expands its electric vehicle production, the demand for high-quality graphite will also rise. This could drive investment in graphite mining operations to ensure a stable supply chain for EV manufacturers.

Two companies that could play future roles in supplying the necessary minerals for Honda’s electric vehicle project are Recharge Resources Ltd. (CSE:RR | OTC:RECHF) and Lomiko Metals Inc. (TSX.V: LMR).

Recharge Resources is a junior exploration company with four projects in Canada and Argentina in lithium and nickel, and the company may find itself in a favorable position to meet the increased demand for these minerals. With an emphasis on sustainable and responsible mining practices, Recharge Resources aligns with Honda’s commitment to environmental responsibility. Lomiko Metals is another company involved in graphite with advanced projects in Quebec, Canada. They could become a significant player in supplying high-quality graphite for the production of EV batteries, especially if the demand continues to grow due to Honda’s expansion into the electric vehicle market.

Honda’s potential investment in building an electric vehicle plant in Canada marks a significant step forward for the company and the broader automotive industry. As automakers worldwide shift their focus to electric mobility, the mining sector, particularly in lithium and graphite, is poised for expansion. Companies like Recharge Resources and Lomiko Metals are well-positioned to play key roles in supplying the essential minerals needed for electric vehicle batteries. This project could be a catalyst for growth in the mining industry, ensuring a sustainable supply chain for the electric vehicle revolution.

Follow us on Social Media to receive emerging news updates:

Follow us Facebook:

Follow us Twitter:

Follow us Instagram:

Follow us on LinkedIn:

MiningIR hosts a variety of articles from a range of sources. Our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.
James Hyland, MiningIR