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Canada’s Critical Minerals Strategy Gets $3.8 Billion In Federal Funding

Canada has an abundance of cobalt, graphite, lithium, and nickel, essential to creating the low carbon, digitized economy of the future.

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Critical minerals are vital to green energy and low and zero CO2 technologies, such as wind turbines, solar panels, electric vehicles, and storage batteries. Desirable renewable energy investments are driving up demand for resources like lithium, cobalt, and copper, which form the mineral backbone of green technologies.

The World Bank forecasts that a 500% increase by 2050 will be necessary in the production of minerals like cobalt just to feed the clean energy transition to batteries. For minerals such as lithium and graphite, demand could increase by as much as 4,000%. Like many countries around the world, Canada has been reflecting on the need to have stable and secure resources and the clean technologies they enable.

It’s become clear that there is no global energy transition without accelerated activity in the critical minerals space.

Canada has come to see the collective contexts of exploration, extraction, processing, product manufacturing, and recycling of critical minerals as an opportune moment in time for Canada. So this month Canada’s Minister of Natural Resources released Canada’s Critical Minerals Strategy, backed up by $3.8 billion in federal funding allocated in Budget 2022.

The proposed funding covers a range of industrial activities, from geoscience and exploration to mineral processing, manufacturing, and recycling applications, including support for research, development, and technological deployment. It’s an all-encompassing, strategic jab at what the country sees as “the generational economic opportunity presented by critical minerals.”

Did you know that Canada currently produces 60 minerals and metals at 200 mines and 6,500 sand, gravel, and stone quarries across the country? That Canada is home to almost half of the world’s publicly listed mining and mineral exploration companies, with a presence in more than 100 countries and a combined market capitalization of $520 billion?

Two important factors that control Canada and other countries’ supply security are the sources of critical minerals and elements and their abundance or distribution. Global production of a critical mineral or element is often limited to a few countries.

An additional source restriction is that many of the critical elements are by-products and have both varying main-product metal companionality. The Strategy focuses on opportunities at every stage along the value chain for Canada’s 31 critical minerals and outlines how, by doing so, Canada can accomplish 5 key outcomes:

  • Supporting economic growth, competitiveness and job creation;
  • Promoting climate action and environmental protection;
  • Advancing reconciliation with Indigenous Peoples;
  • Fostering diverse and inclusive work forces and communities; and,
  • Enhancing global security and partnership with allies.

Critically, the Strategy outlines concrete measures:

  • to accelerate regulatory processes at the sub-national, national and international levels;
  • to ensure meaningful and ongoing Indigenous partnership throughout the value chain; and,
  • to ensure that the Strategy is in line with Canada’s ambitious climate and nature protection goals.

But there are substantial concerns to navigate when it comes to sourcing green energy minerals.

It’s the Jobs, Stupid

The announcement is one of a series of significant steps the Government of Canada continues to take to support sustainable jobs and protect the environment. Minister Jonathan Wilkinson will liaison with partners to establish Canada as a major global supplier of choice for clean energy in a net-zero world — “ensuring a prosperous and clean future for Canadians from coast to coast to coast.”

Canada recognizes that minerals are not just the building blocks of clean technology like solar panels and electric vehicle batteries – “they are a key ingredient for creating middle class jobs and growing a strong, globally competitive Canadian economy.” As lower emission industries come online, workers from other extractive sectors, like oil and gas, will be able to use their transferable skills to secure high quality jobs in critical mineral exploration, extraction, processing, manufacturing, and recycling.

The Government of Canada has already invested significantly in the critical minerals value chain throughout the past number of years with:

  • sustainable potash mining in Saskatchewan;
  • mining of rare earth elements in the Northwest Territories; and.
  • electric vehicle assembly in Quebec.

The Regional Energy and Resource Tables will act as a future forum to align federal and provincial resources toward the development of key regional economic opportunities, including opportunities in the critical minerals sector. Tables have been set up with British Columbia, Yukon, the Northwest Territories, Manitoba, Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick, and Prince Edward Island. Through the Regional Tables, the Government is seeking to establish joint partnerships with each province and territory, as well as formal collaboration with Indigenous partners, to identify and accelerate opportunities to transform Canada’s traditional resource industries and advance emerging ones. The Critical Minerals Indigenous Engagement Strategy will ensure the unique rights, interests, and circumstances of the First Nations, Métis Nation, and Inuit are acknowledged, affirmed, and implemented at national, regional, and industry levels.

Importantly, the Extractive Sector Transparency Measures Act guides Canada as it seeks to advance efforts that support human rights through collaboration on transparency and traceability in the critical mineral supply chain. There has also been increased recognition that Indigenous perspectives must be better integrated into ESG standards and ratings to ensure investor certainty while advancing economic reconciliation in Canada’s mining and manufacturing sectors.

The global transition to a greener future is expected to increase the volume of end-of-life clean and digital technologies. For that reason, the Strategy seeks to advance circular solutions to close material loops, increase access to the minerals and metals contained in post-consumer goods through robust recycling infrastructure and secondary markets, and encourage their recovery from mining and industrial waste streams. Circularity will help Canada to retain the benefits from the extraction of its critical minerals for decades to come, capitalizing on an industrial segment with untapped potential.

Final Thoughts

The urgency of climate action has brought fresh attention to the critical minerals sector. Canada considers itself home to a competitive, sustainable, and responsible minerals industry that benefits all Canadians. The country is a global leader in mining-related science, technology, social, and environmental practices with a clear and predictable regulatory environment, innovative clean technology solutions, and best management practices.

Many constituent groups are joining in with Canada’s critical minerals initiative. For example, in May, 2022, Vale and Tesla confirmed a multi-year agreement that will see Vale supply Tesla with low carbon nickel (to be used in manufacturing lithium-ion batteries) from its Long Harbour refinery in Newfoundland, while the raw material will be sourced from Vale’s Voisey Bay mine in Labrador.

Image courtesy of Natural Resources Canada

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Carolyn Fortuna (they, them), Ph.D., is a writer, researcher, and educator with a lifelong dedication to ecojustice. Carolyn has won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. Carolyn is a small-time investor in Tesla and an owner of a Model Y as well as a Chevy Bolt. Please follow Carolyn on Twitter and Facebook.


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