Critical minerals make the modern world work. Minerals such as copper, nickel, lithium, graphite and cobalt are the building blocks of renewable energy projects and electric vehicles. There is no energy transition without them.
This is why The Globe and Mail has launched Mission Critical, a series of stories that looks at the issues around whether Canada can become a critical minerals mining superpower. Ottawa has big ambitions in clean technology and Prime Minister Justin Trudeau wants Canada to become “a world leader” in critical minerals and batteries. Our aim is to discuss the challenges Canada faces to get there and the changes needed.
The shift to a clean-energy system is set to drive a huge increase in demand for these minerals. According to the World Bank, the current global production capacity of key minerals will need to increase 500 per cent by 2050 to meet the demands of the clean-energy transition.
In 2021, Ottawa released a critical minerals strategy and has been doling out $1.5-billion to various companies in the critical minerals supply chain. Most provinces have followed suit with their own plans – all aimed at attracting investment and creating jobs.
But for Canada to become a global player, it must address several key challenges. We’ll explore them in the coming months.
Competition: Industrialized countries around the world are locked in a race to secure critical mineral supplies as they attempt to build out battery supply chains and attract investment. The effort is to move production and processing closer to home and achieve “mineral security.” Today, The Globe’s mining reporter, Niall McGee, explains how Canada’s policies around foreign direct investment present an existential threat for mining companies here, while benefiting other countries such as Australia.
Money: It will take significant foreign direct investment and Canadian dollars to support this strategy. Canada’s protectionist measures, largely aimed at China, might be unwelcome for Canadian mining companies dealing in critical minerals since the pool of potential capital available to them has been reduced. Any ability to finance now will require them to go to a shallower or smaller pool, which also means that how they finance their projects may change.
Environmental costs: Mining for critical minerals remains a dirty business. Though environmental impacts are expected to ease in a clean-energy transition, there will still be significant impacts from mining, processing and transportation. A lot of it will happen in places where we haven’t seen large-scale mining before.
Geopolitics: China is years ahead and able to build, explore, refine and export in more efficient ways than its rivals. Canada wants to reach deals with countries that are more dependable trading partners than China.
Indigenous participation: Many of these minerals will come from Indigenous lands. Indigenous communities have often been sidelined or suffered negative impacts from mining projects – in Canada and around the world. While there are great potential economic benefits, the key to success, according to the First Nations Major Project Coalition, will be to prioritize Indigenous values, including corporate governance, equity ownership and environmental protection.
Regulations: According to an International Energy Agency analysis of major mines that came online from 2010 to 2019, it took an average of more than 16 years to develop projects from discovery to first production, although the exact duration varies by mineral, location and mine type. In Canada, the time can be much, much longer – up to 20 years. Ottawa and the provinces have vowed to cut red tape in the mining sector to move large resource projects along faster. How’s that going?
- Ryan MacDonald, senior editor, climate, environment and energy