Canada needs to quickly ramp up production of critical minerals and play a global leadership role to defend against energy security crises triggered by countries that use fossil fuels as a weapon, said the head of the International Energy Agency.
During a government-organized panel discussion in Ottawa Wednesday, Fatih Birol warned that the energy shortages currently gripping Europe could be repeated as the world transitions to cleaner fuels, if Western countries do not increase the availability of rare earth minerals and develop friendlier sources of them.
The minerals are central to net-zero energy sources that Mr. Birol said need to replace conventional, fossil-fuel emitting energy. Just as oil and gas is being used by Russia as a weapon, he said the same could happen to the supply of critical minerals.
“As a world, we should learn from this bitter experience,” Mr. Birol said, sitting beside federal Natural Resources Minister Jonathan Wilkinson. But so far the same concentration of supply of oil and gas is happening with critical minerals, said Mr. Birol, with only a small number of countries bringing the minerals to market. Current production and refining of critical minerals is concentrated in a handful of countries, most notably China.
Mr. Birol said he would like to see countries like Canada more involved on the international stage because “there is rule of law, there is transparency, and there is also accountability of the government.”
The sooner that happens, the better, he said.
That is a steep ask for Canada where provincial and federal regulators are involved in mine approvals, which are at times cumbersome. Prime Minister Justin Trudeau’s Liberal government has vowed to cut the red tape that stymies the sector. The promise came last year after intense criticism that Canada risks being left behind in the global scramble to secure critical minerals.
It can take up to 25 years to get a minerals mine into production – far slower than international competitors such as Australia. Speaking to reporters after the panel, Mr. Wilkinson said the average time it takes is about 12 to 15 years, but added that even that is too long.
“If it takes us 12 to 15 years, we are going to have a real problem,” he said.
“We have to find ways to go more quickly,” to help satisfy domestic and international demands for critical minerals, Mr. Wilkinson said Wednesday. However, he didn’t put any deadline on the talks with provinces and territories to revamp the regulatory process and wouldn’t say how long he thinks is a reasonable time frame for regulatory review. He said, though, it might be different between provinces.
Critical minerals are used in net-zero technologies such as batteries for electric cars and for solar and wind power.
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 Ontario’s long-delayed Ring of Fire project, had been vocal about how slow the permitting process is in Canada. Company executives recently met with Canadian politicians to plead for a reduction in red tape.
Well-known Canadian academic and conservative Jack Mintz has also taken the glut of federal mining regulations to task, arguing in a December report with colleague Philip Bazel that “Canada’s participation in the energy transition mining market may hinge on the shape of its regulatory and taxation framework.”
The pair also said Canada was unlikely to benefit much from the explosion in global demand for critical minerals because of a dearth of reserves, writing that most of those minerals for North America’s energy transition will have to come from reserves in South America, Africa and the Caribbean, as well as Australia and China.
Citing worldwide data on critical minerals reserves data from the U.S. Geological Survey, the authors point out that Canada is a bit player in lithium, cobalt, copper, graphite and nickel, all of which are used in low-carbon energy, such as electric-vehicle batteries. Reserves are minerals in the ground whose economic viability has been proven.
Still, Mr. Wilkinson insisted that Canada won’t miss the competitive opportunity of critical minerals. Ottawa is working 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, he said.
“We are very focused on how do you go faster, in a manner that respects the environment and in a manner that respects Indigenous rights.”
The focus on environmentally and socially responsible production is why Mr. Birol said he believes Canada should be a “champion” in the sector.
Beyond mining, Mr. Wilkinson said there are other opportunities for Canada in the critical mineral field, for example, extracting lithium from brines, which he said is “a lot easier and faster to put into practice than starting a brand new mine.”
After a recent discussion with his Australian counterpart, he said the relationship between allies on critical minerals is more about collaboration than competition – which could help hasten and improve production.
“There is so much demand. If we are going to execute the energy transition, it is better for us to actually find ways to partner, to expedite the work that both of us are doing,” he said.
That could include each country taking lessons from each other’s regulatory processes and investment instruments.