Lithium explorer Sayona Mining took a tumble today after Canadian authorities demanded an investigation into the impact of its lithium project on local drinking water.

The news forced shares down 22.5 per cent to an intra-day low of 3.1c on Monday.

Sayona’s (ASX:SYA) Authier lithium deposit is 7km north-west of the village of La Motte in Abitibi-Témiscamingue (see map below).

“The proximity of this site with Esker Saint-Mathieu-Berry, which supplies Eska bottled water to the city of Amos, raises concerns among the population,” said Isabelle Melançon, Quebec Minister of Sustainable Development, Environment and the Fight Against Climate Change.

Sayona told investors that the minister plans to recommend the Authier project be subject to the environmental impact assessment and review procedure, unless the company files an application to allow the Office of Public Hearings on the Environment (BAPE) to hold a public hearing.

“Undertaking the BAPE process will likely extend the permitting period,” Sayona said.

Ms Melançon said the project is not automatically subject to the environmental impact assessment and review procedure.

The Authier project is expected to produce 99,000 tonnes of lithium each year, but the company wants to further refine that to produce 13,000 tonnes of lithium carbonate and 14,000 tonnes of lithium hydroxide each year to supply the battery market.

Lithium hydroxide is mainly used to produce lithium greases, but it is also used as a heat-transfer medium and as a storage-battery electrolyte.

Lithium carbonate, however, has been the more widely produced compound and is usually the first product in the lithium production chain.

Both products fetch a substantially higher price than standard spodumene production.

Sayona Mining (ASX:SYA) hit an intra-day low of 3.1c on Monday.

Sayona Mining (ASX:SYA) hit an intra-day low of 3.1c on Monday.Spodumene is the main lithium bearing mineral mined from most hard rock lithium mines around the world.

Sayona said it has been undertaking a public consultation process since May 18 to outline the steps it will take to protect the environment and minimise the project’s impact on local communities.

“All relevant reports have been made available to the public and the company has made itself available during this consultation process to respond to questions about the Authier project,” Sayona said.

The public consultation process runs until August 20.

Sayona has requested a meeting with the Department of Sustainable Development, Environment and the Fight Against Climate Change to discuss the situation.

The company is pushing ahead with a definitive feasibility study.

Stockhead is seeking comment from Sayona.

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