Mangrove lithium deal links public capital and tax credits to de-risk battery supply chains
Canada is using an up to US$85m financing package for Mangrove Lithium as a test case for how public capital and tax credits can de-risk domestic lithium refining and crowd in private investors.
Canada Growth Fund Inc. (CGF) will invest up to US$65m in Mangrove Water Technologies Ltd. (Mangrove Lithium), alongside a $9m Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC)-backed loan underwritten by National Bank of Canada.
Existing investors, including Breakthrough Energy Ventures and BMW i Ventures, also joined the deal.
Proceeds will commission Mangrove Lithium’s first commercial refinery in Delta, BC, and advance a planned full-scale plant designed to produce up to 20,000 tonnes of battery-grade material a year.
CGF is deploying capital during Mangrove Lithium’s “technological and commercial de-risking phase” to attract additional private investment in the company.
The funding is meant to support an integrated mining‑to‑refining lithium supply chain based on Canadian intellectual property, while keeping the headquarters in Canada and supporting skilled jobs.
“This transaction will enable Mangrove Lithium to advance its commercial development in a sector that is critical for Canada,” said Yannick Beaudoin, president and chief executive officer of Canada Growth Fund Investment Management.
Mangrove Lithium has completed Phase 1 construction of its first-of-a-kind Single Stack Plant in Delta, BC, with a 1,000 tonne per annum capacity, which the company says can supply battery-grade materials for about 25,000 electric vehicles a year.
The next project is expected to power more than 500,000 electric vehicles annually. In parallel, Mangrove Lithium is advancing its first full-scale plant (FSP), for which early engineering is complete and site selection in Canada has begun.
The FSP is expected to have a 20,000 tonne per year capacity and to bring large-scale lithium conversion and refining onshore, reducing reliance on overseas processing and exposure to geopolitical risk and price volatility, while keeping more critical minerals value within North America.
The CTM ITC provides refundable tax credits for qualifying clean technology manufacturing projects that process six key critical minerals, including lithium.
Mangrove Lithium has used an ITC bridge loan structure to turn those future tax credits into upfront capital.
National Bank of Canada’s $9m CTM ITC-backed facility is based on eligible capital expenditures under the CTM ITC and is expected to be used again to finance the company’s FSP and future projects.
Mangrove Lithium is developing a feedstock-flexible, electrochemical refining platform that produces battery-grade lithium hydroxide or lithium carbonate.
The company expects the process to be more economical than conventional refining methods and to offer environmental benefits, including lower carbon intensity and reduced waste.
