Ontario is taking baby steps into the critical minerals sector, but a government minister cautioned that the province’s financial commitment will be small and measured.
Greg Rickford, Ontario’s Minister of Energy, Mines, Northern Development and Indigenous Affairs, said the province is starting a public consultation period on critical minerals, with a goal of reducing red tape and attracting more investment into the sector. The consultation will be open to a range of stakeholders, including the mining industry, Indigenous land owners and investors.
The province hopes to have its critical minerals strategy in place by the end of the year. The minister made the announcement virtually at the annual Prospectors & Developers Association of Canada (PDAC) mining conference on Wednesday.
Critical minerals, such as cobalt, lithium and graphite, are used in a range of industries, including defence, aerospace and high tech. Over the past few years, there has been a North American push to boost the production of critical minerals as fears of a Chinese stranglehold on global supply intensify. In 2019, Canada and the United States agreed to co-operate on a joint strategic and critical minerals strategy.
The consultation announcement from Ontario lags efforts by Quebec, which already has a critical minerals strategy in place. Quebec rolled out its blueprint last October, and it committed to investing $90-million in the sector over five years.
In January, the province announced a US$650,00 investment into a scandium project owned by Rio Tinto Group, which promises to be the first reliable source of the critical mineral in North America.
“We’re very conscious of the competition that’s out there between jurisdictions,” Mr. Rickford said in a news conference when asked about Ontario falling behind Quebec in critical minerals.
“You’re going to see some other policy levers pulled by the government of Ontario in the not-too-distant future to incentivize,” he added.
Even before Quebec announced its strategy, the province invested heavily in critical minerals, including putting $175-million into Nemaska Lithium Inc. The junior miner had planned to developed a lithium project in northern Quebec, but after running into serious problems with its manufacturing process, the company entered creditor protection in 2019.
Despite the poor results so far, Quebec has stuck with Nemaska, calling it a “strategic” investment.
Mr. Rickford made it clear on Wednesday that Ontario isn’t likely to make similarly huge bets with its strategic minerals investments.
“We don’t necessarily view this as something that the taxpayers have to throw huge chunks of money at,” he said. “We’re taking pragmatic steps.”
The minister said the province instead will concentrate on helping critical minerals companies that can potentially produce or refine elements that feed into the automotive sector. To wit, late last year, the government invested $5-million in Toronto-based First Cobalt Corp., which is developing a cobalt refinery in Northern Ontario. Cobalt is a key raw material in batteries for electric cars, and First Cobalt hopes to eventually supply auto makers in the province.
The steady-as-she-goes approach from Mr. Rickford on critical minerals stands in sharp contrast to a few years ago, when he advocated investing hundreds of millions of taxpayer dollars in the sector. In 2019, he asked the federal government to go 50-50 on a $1.6-billion investment to build an access road to connect the Ring of Fire development to the provincial highway grid. Discovered in 2007, and located in Ontario’s Far North, the Ring of Fire site still sits undeveloped.
Much of the early promise of the project was built on a back-of-the-envelope estimate by geologist James Franklin, who pegged the value of the minerals at $60-billion. In 2019, Mr. Franklin disavowed the figure in a Globe and Mail interview.
The Ring contains mostly economically unproven amounts of chromite – a critical mineral used in the production of stainless steel. While studies of the potential environmental impact of the access road are continuing, there have been no commitments from either Ottawa or the Ontario government to build it.
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