Quebec Graphite Mine Restart Delayed — a Setback for Canada's EV Battery Supply Chain

Northern Graphite has postponed the restart of its flagship Lac des Îles mine in Quebec, dealing a blow to Canada's push to build a secure domestic supply chain for the critical minerals that feed EV batteries. As Canada's National Observer reported Sept. 2, the Ottawa-headquartered miner said its aim to resume operations by the third quarter of 2026 is no longer feasible after Quebec's ministry of natural resources and forests suspended the mining lease amid a dispute over an outstanding restoration payment.

A lease suspended, a company in court

The mine, located northwest of Montreal, is North America's only commercial flake graphite mine. The province suspended the lease over a payment related to the future restoration of the Lac des Îles site — a calculation Northern Graphite firmly contests. The company plans to fight the decision in Quebec Superior Court and will file an appeal seeking to stay the suspension until a final ruling. The standoff compounds a severe cash crunch: Northern reported just $200,000 in cash and equivalents in its second-quarter results, down from $1.1 million the previous quarter, along with a $3-million net loss for the three months ended June and negative working capital of $56.6 million.

• Q3 2026 — the restart target that is no longer feasible
• $200,000 — cash on hand at the end of Q2, down from $1.1 million
• $3 million — net loss for the quarter ended June
• $56.6 million — negative working capital
• US$22.5 million — debt restructured with Sprott in April to stave off long-term closure

Why graphite matters for EVs

Graphite is the largest component of an EV battery anode by weight, and China controls nearly 80 percent of global natural graphite production. Macquarie estimated in a recent market outlook that six million tonnes a year of graphite will be needed globally for EV and grid batteries by the end of the decade. Northern's own quarterly report describes the wider market outlook as "subdued in the short-and medium term amid structural oversupply" — pressure that deepened when the U.S. International Trade Commission unexpectedly declined to impose duties on China's exports of active anode material, the processed battery-grade form of graphite, preserving American access to cheap Chinese supply even as 93.5 percent anti-dumping duties apply to raw Chinese graphite.

The Canadian angle

For Canada's EV industrial strategy, the timing is grim. The shutdown clouds Northern's plan to turn a former pulp-and-paper complex in Baie-Comeau, Quebec into a $2-billion multimodal export hub for processed graphite. It also highlights a critique from domestic manufacturing advocates: Northern's most concrete recent move is a US$200-million joint venture with Saudi Arabia's Al Obeikan Investment Group to build a battery-anode plant in Yanbu that would process 25,000 tonnes of graphite per year — sourced from the company's Okanjande mine in Namibia, not from Canada. Marilyn Spink of the Canadian Critical Minerals and Materials Alliance told the National Observer it would be better to see that refining capacity built here. The global natural graphite market stood at US$30 billion last year and is forecast to more than double to US$65 billion by 2034, according to Precedence Research — growth Canadian mines are currently struggling to capture.

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