A strategy for critical minerals
Canada’s critical minerals strategy sets out a clear pathway for increasing the country’s ability to supply itself and global markets with high-priority minerals, such as lithium, cobalt, magnesium and rare earth elements. supplied
The world’s journey towards a net-zero future continues to advance on a momentum of joint commitments – between governments, industry and environmental organizations – powered by renewable energy and clean technologies.
For Canada’s mining industry, this translates into an intensified focus on critical minerals – the building blocks for so many green-economy innovations, from wind turbines and solar panels to electric car batteries and LED lights.
“Canada is very well endowed with so many of the world’s most critical minerals,” says Alex Christopher, president of the Prospectors & Developers Association of Canada. “We are in a position to become a leading source of critical minerals not only for domestic use but also to supply the rest of the world.”
The rollout last December of Canada’s critical minerals strategy – following a federal budget that allocated $3.8-billion to mineral exploration and mining – sets out a clear pathway for increasing the country’s ability to supply itself and global markets with high-priority minerals such as lithium, cobalt, magnesium and rare earth elements.
The strategy aligns with a number of PDAC recommendations, including meaningful investments in geoscience as well as targeted financial incentives for critical minerals exploration in Canada. The latter includes an increased tax credit of 30 per cent – double the previous credit – that can be extended through flow-through shares to investors in critical minerals exploration.
“With this strategy, and the money that’s being put on the table to support it, the government is solidifying its commitment to critical minerals exploration and mining in Canada,” says Mr. Christopher. “So now we need to be able to execute and move projects forward. And the better we perform, the faster we will reach our economic, environmental and societal goals.”
There’s a lot of work ahead. The industry today is in varying states of readiness to produce critical minerals, says Mr. Christopher. Thanks to a strong focus in recent years on minerals for battery technology, a number of projects to mine nickel, copper, lithium and rare earth elements are at “relatively advanced stages.
“For those that are still in early stages, there must be a clear and transparent process to move viable projects forward, and we need to find ways to accelerate development,” says Mr. Christopher. “For one, federal and provincial governments must streamline permitting processes to eliminate redundancies and ensure new mines are not subject to lengthy delays simply due to multiple independent and overlapping processes needing to run their course.”
“You can have all the capital in the world, but if you don’t have engagement and agreement with communities, then you’ll likely face challenges that could derail a project. Make sure you’re transparent and working in alignment with the interests of the community. These are exciting times full of great opportunities – let’s be ready for them.”
Canada also needs to build more downstream infrastructure to reduce, perhaps even eliminate, the need to send critical minerals produced in Canada offshore for processing. Doing this will strengthen the country’s self-sufficiency in critical minerals while adding new capabilities to its minerals ecosystem.
“Power, road and water infrastructure around exploration and mining sites are also big considerations,” says Mr. Christopher. “Some of these critical mineral deposits are not big, so a single operation may not be able to support the required infrastructure. We’ll continue to advocate to government for public funding to advance certain critical infrastructure that will serve the public well and generate tangible economic development opportunities.”
Industry and governments should also continue to revisit the definition of critical minerals to ensure that other important minerals not included in the list are not unfairly excluded from the supportive mechanisms built into Canada’s critical minerals strategy.
At the same time, the country’s exploration and mining companies should position themselves to make the most of this bold and ambitious plan. An important first step, says Mr. Christopher, is engagement with communities to ensure they support and participate in future projects.
“You can have all the capital in the world, but if you don’t have engagement and agreement with communities, then you’ll likely face challenges that could derail a project,” he says. “Make sure you’re transparent and working in alignment with the interests of the community. These are exciting times full of great opportunities – let’s be ready for them.”
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