There’s been a lot of media coverage lately about Canada’s critical minerals strategy, so we thought we’d take this opportunity to provide an overview and some clarification while sharing how this strategy may evolve in the next few years.

In a recently published document entitled The Canadian Critical Minerals Strategy, François-Philippe Champagne, Minister of Innovation, Science and Industry articulated Canada’s national strategy as follows:

“The global clean energy transition is underway, and it represents the largest economic transformation since the Industrial Revolution. Canada is poised to seize this generational opportunity – particularly in the critical minerals sector, from mining to refining and from manufacturing to recycling…As global demand for critical minerals skyrockets, Canada will be extremely well positioned to take advantage of this opportunity. Thanks to our wealth of critical minerals, our excellence in mining, our skilled labour and our innovation ecosystem, Canada will become the world’s green supplier of choice for critical minerals.”

Tracking developments

At FOCAL we are tracking developments in this area carefully. The FOCAL team has been constantly engaging in conversations and consultation sessions with mining experts to better our understanding of the topic. We also aim to build our research on accurate and realistic assumptions of the transition to clean energy.

 A recent piece in The Globe and Mail highlighted just how important a sense of balance is when discussing the issue. It stated in part: “…it can take more than a decade to get a battery metals mine approved and built in this country.”

Perspective is key

A powerful sense of perspective is required when discussing this subject. The challenges surrounding the matter of getting critical minerals out of the ground are significant, and they are not confined to the mechanical process of excavation. Those challenges include:

• Building mining-related infrastructure, such as roads and electrical power. This is time-consuming and costly, but it’s happening.
• Obtaining environmental and Indigenous land development approvals. This may pose some challenges, but progress is being made.
• Recognizing that mining has difficulty attracting talent, and geology or mining engineering programs face similar challenges as others in attracting enough suitable candidates. There is much work to do regarding this challenge.
• Securing much-needed capital investments in mining from electric-vehicle manufacturers. This is happening, according to a recent Bloomberg report.
• Ensuring governments—provincial and federal—who are today committed to this initiative, continue to do so in the future.
• Building on Canada’s material processing capabilities to ensure the ability of transforming raw materials into finished products.

The EV manufacturing segment of our economy, supported by our abundant critical minerals resources, mature manufacturing know-how, and government policy focus means we can now harness and develop the entire supply chain and process, from mining to manufacturing. This requires strategic planning and coordination among all stakeholders.

Progress is palpable

The good news is that automotive manufacturers, industry suppliers—and their investors—are helping to support this shift. In a more upbeat opinion piece by an industry executive, The Globe and Mail noted that investors from the automotive sector are motivated to act, as are big tech companies who also need these critical minerals for production. “Meanwhile,” the article asserts. “Miners should welcome them all.”

The even better news is that governments are moving in the right direction, too. Ontario’s recent announcement of red-tape reduction to speed up approvals for mining projects is welcome. As The Globe and Mail also reported:

“The potential amendments to the provincial Mining Act…would address an issue that has been causing concern among policy makers across the country. The federal government said late last year that it was working with the provinces and territories to reduce red tape in the sector, after conceding that mine approvals take far too long. Developing a mine in Canada can take up to 25 years. Ontario Minister of Mines George Pirie echoed this sentiment in a news release, which stated: ‘This process is too time consuming and costly, leading to project delays and lost opportunities for Ontario’s mineral exploration and mining sector. We need to get building.’”

Conclusion

FOCAL supports initiatives to help the expanding EV sector. Our thinking on this subject was precipitated in part by the publication of a KPMG report entitled How Canada could become a global powerhouse in EV production. First distributed in June 2022, the report stated:

“While electric vehicles (EVs) are good for the planet, they could also be good for the Canadian economy. Canada has been building automobiles for more than a century, but the country has an opportunity to leverage its unique assets to build a ‘mines to mobility’ ecosystem to move Canada from a player in the EV sector to a leader. 

Canada has access to many of the critical resources to become a leader: established manufacturers and suppliers, skilled labour, government support, access to critical minerals (notably lithium and cobalt) needed to build the batteries that power EVs, and proximity to the U.S. market.”

We wrote about this last year in the KPMG report and are delighted to see just how many of its observations and predictions are bearing fruit. Alex Christopher, president of the Prospectors and Developers Association (PDAC), appears to agree. “Canada is very well endowed with so many of the world’s most critical minerals,” he says. “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 several 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%—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,” observes 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.”

It seems we’re well on our way.

Follow FOCAL to stay informed

We’ve got a lot of work ahead of us and we’re geared up to handle it. Please follow FOCAL on LinkedIn, Facebook, Twitter and Instagram to stay informed about the progress we’re making  and gain access to resources and special events as well as funding opportunities for employers. 

We encourage everyone reading this blog to share it with their professional networks to best share these opportunities with automotive sector staff and employers. Again, the FOCAL team welcomes your questions and feedback – you may contact us at your convenience.