UPDATE 1-Canada Lithium hires engineers for Quebec mine

Mon Jan 24, 2011 12:09pm EST

* Mine to cost $202 mln to develop; production seen by 2012

* To produce 44 mln pounds of lithium carbonate per year

* Shares fall 4.1 pct to C$1.40 on TSX (In U.S. dollars unless noted)

TORONTO, Jan 24 (Reuters) - Canada Lithium Corp CLQ.TO said on Monday that it had hired Genivar Inc (GNV.TO) to manage the engineering contracts at its Quebec Lithium project, which could see limited production by 2012 of the metal used in high-tech electronics.

Genivar, which is currently building a lithium cathode plant near Montreal, will manage the construction of the $202 million open-pit mine and processing facility in Val D'or, Quebec, about 525 km (325 miles) northwest of Montreal.

Genivar will work with mineral processing and engineering firm Met-Chem Canada on the Quebec Lithium project.

Canada Lithium said site work at the mine and processing plant would begin in mid-2011, with production set to start in late 2012 and full production by 2013.

The project, which will mine lithium from hard rock and convert it to battery-grade lithium carbonate, is expected to produce 44 million pounds of carbonate a year.

The majority of global lithium production comes from lithium brines in South America. Hard rock lithium is mined primarily in Australia.

Lithium carbonate, which is used in electric and hybrid vehicles, as well as computer batteries and smartphones, is in high demand, with analysts predicting even bigger gains in years to come.

Shares of Canada Lithium were down 4.1 percent at C$1.40 on Monday on the Toronto Stock Exchange, while rival lithium juniors Lithium Americas (LAC.TO) and Lithium One LI.V slipped more than 2 percent.

($1=$0.99 Canadian) (Reporting by Julie Gordon; editing by Rob Wilson)

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