Canada is on a mission to secure its supply of critical minerals, the key ingredients for the energy transition. The country plans to cut the time to develop new mines by nearly a decade and offer incentives to attract investment.
What are critical minerals?
Critical minerals are metals and minerals that are essential for the production of clean energy technologies, such as electric vehicles, wind turbines, solar panels, and batteries. They include lithium, graphite, nickel, cobalt, copper, and rare earth elements.
These minerals are in high demand as the world shifts to a low-carbon economy, but their supply is often concentrated in a few countries, mainly China. China controls most of the world’s refined cobalt and rare earths supplies, and has been accused of using its dominance as a geopolitical tool.
Canada, which has abundant natural resources and a strong mining sector, sees an opportunity to become a global leader in the production and processing of critical minerals. The country has set a goal to achieve net-zero greenhouse gas emissions by 2050, and wants to ensure its energy security and competitiveness in the process.
How will Canada speed up mining?
Canada’s energy minister Jonathan Wilkinson told Reuters that the country wants to slash the time it takes to develop new critical mineral mines by nearly a decade, from 12 to 15 years to about five.
He said the government will streamline the regulatory and permitting processes, by running them in parallel instead of sequentially, and by providing more funding to the agencies involved. He also said the government will invest in infrastructure, such as roads and transmission lines, to facilitate the development of remote mining projects.
To attract investment, Canada will offer tax credits and loan guarantees to mining and mineral processing companies, as well as to indigenous communities that want to participate as equity partners. Wilkinson said the government is also investing billions of dollars in several battery factory projects in Canada, including those by Swedish battery producer Northvolt and German car manufacturer Volkswagen.
What are the challenges and opportunities?
Canada faces some challenges in its quest to become a critical mineral powerhouse. One of them is the environmental and social impact of mining, which can cause land degradation, water pollution, greenhouse gas emissions, and human rights violations.
Wilkinson said the government will not compromise on environmental standards, and will work with indigenous groups and local communities to ensure their consent and benefit. He said the environmental community also recognizes the need for critical minerals for the energy transition.
Another challenge is the global competition and market volatility. Canada will have to contend with other countries, such as Australia, that are also ramping up their critical mineral production. It will also have to cope with the fluctuations in demand and prices, which can affect the profitability and viability of mining projects.
However, Canada also has many opportunities to capitalize on its critical mineral potential. It has a strong reputation for mining expertise, innovation, and governance. It has a close relationship with the United States, its largest trading partner and ally, which has designated Canada as a reliable supplier of critical minerals. It also has access to other markets, such as Europe and Asia, that are seeking to diversify their sources of critical minerals.
Canada’s race to mine the future is not only a matter of economic opportunity, but also of strategic importance. By securing its supply of critical minerals, Canada can enhance its energy security, reduce its dependence on foreign imports, and contribute to the global fight against climate change.
Source: Reuters
