Ottawa is vowing to cut red tape in the mining sector in an attempt to move large resource projects along faster, after facing intense criticism that Canada risks being left behind in the global scramble to secure critical minerals.
In the federal government’s long-awaited critical minerals strategy, unveiled on Friday, Ottawa acknowledged that getting a Canadian mine for the minerals into production can take up to 25 years. That is far slower than other international mining jurisdictions that Canada competes against, such as Australia, in which projects are developed in a fraction of that time.
“We recognize that, although responsible regulations are vital, complex regulatory and permitting processes can hinder the economic competitiveness of the sector and increase investment risk,” the federal government said in its release.
Top federal government official casts doubt on Ontario’s Ring of Fire mining development
Ottawa says it will attempt to harmonize, co-ordinate, and streamline the permitting and environmental review process to avoid the duplication that often happens when the federal government and provinces are involved.
At the same time, Ottawa says it remains steadfast in its conviction to respect the rights of Indigenous peoples. Under Canada’s Constitution, Indigenous peoples must be extensively consulted on resource projects. And Indigenous groups sometimes lead key environmental impact studies on resource projects, which gives them huge influence.
Earlier this week, Jack Mintz, a well-known Canadian academic, said that Canada may end up as an also-ran in the global critical minerals race, unless it reduces the regulatory burden on the mining industry.
A prime example of how slow things move in Canada is the Ring of Fire region in Ontario’s far north. Critical minerals were discovered there in 2006, but at the current pace of development, mining, if it ever happens, likely wouldn’t begin until some time in the 2030s.
Ottawa approves new Ontario critical minerals mine in bid to claw back Russian dominance in palladium
When asked about the languid dynamic between the provinces and Ottawa in large resource projects such as the Ring of Fire, federal Natural Resources Minister Jonathan Wilkinson said in an interview that there is ample opportunity to make things more efficient.
Various provincial and federal environmental studies on mining projects should be run concurrently, as opposed to consecutively, he said. An even better system would be a single assessment that incorporates input from federal and provincial governments.
“We need to be aligning the work that we’re doing with the provinces,” Mr. Wilkinson said. “Ideally, there is one project, one assessment.”
Wyloo Metals Pty Ltd., the Australian resources giant that paid more than half a billion dollars earlier this year for the most promising assets in the Ring of Fire, had been vocal about how slow the permitting process is in Canada, and company executives recently met with Canadian politicians to plead for a reduction in red tape.
Currently, there are three provincial environmental assessments under way in the Ring of Fire that are looking at the impact of a proposed road into the minerals district. There are also three federal impact assessments in process that are roughly similar in scope.
In addition, a broader federal environmental study will assess how development might affect the entire region. That was ordered two years ago but hasn’t started yet, with stakeholders unable to reach agreement even on the terms of the study.
The Ring of Fire has been touted by Ontario for more than a decade as a “generational” critical minerals opportunity. But Jeff Labonté, assistant deputy minister for lands and minerals at Natural Resources Canada, last month told The Globe and Mail that mines might never get built there.
On Friday, however, Mr. Wilkinson also sounded a cautious tone on the Ring of Fire, saying that, owing to environmental concerns, the development is a “particularly challenging” project.
Ottawa’s critical minerals strategy contained no new funding for Canadian critical minerals companies. But earlier this year, the federal government earmarked $3.8-billion toward supporting projects over the next eight years.
It has already spent more than $1-billion, including committing up to $222-million to modernize a Quebec scandium project owned by Rio Tinto Group. Meanwhile, E3 Lithium Ltd., a small Canadian development company, last month received $27-million as it seeks to develop a new lithium project in Alberta.
Martin Turenne, chief executive of FPX Nickel Corp., a Vancouver-based junior nickel company, said one thing missing from Ottawa’s new critical minerals strategy is added financial aid for Indigenous peoples. He said they often don’t have the resources to adequately conduct mining impact studies, a dynamic that not only causes delays, but sometimes results in Indigenous communities turning down projects they might otherwise have approved.
“If you don’t have the capacity internally with appropriate resources to do a proper evaluation of an industrial project, your default answer may be to say, ‘We don’t support it,’” Mr. Turenne said.