Yahoo Finance Ottawa's first critical minerals strategy aims to speed up projects, attract workers
Prime Minister Justin Trudeau’s first significant mining strategy will focus on lithium and handful of other minerals that are key to building electric vehicles, the latest evidence that Ottawa intends to play an active role in ensuring Canada takes advantage of the global rush for the raw ingredients needed to make batteries.
Natural Resources Minister Jonathan Wilkinson released Canada’s first critical minerals strategy on Dec. 9 in Vancouver at around noon local time, a day after Industry Minister François-Philippe Champage announced proposed amendments to the Investment Canada Act that would make it harder for China and other investors that the government distrusts from making a claim on Canadian resources.
“There is no energy transition without critical minerals,” Wilkinson said at the event’s press conference. “The focus of this strategy will be on expanding this sector, moving this forward expeditiously all while doing things in the right way.”
He added that it cannot take Canada “12 to 15 years to open a new mine … not if we want to achieve our climate goals.”
Wilkinson’s 58-page strategy aims to expand exploration activities to find more mineral deposits; speed up mining projects; advance relations with Indigenous groups, which often own land rights where mineral resources are located; tackle labour shortages; and build secure supply chains with allied nations.
The strategy comes with a list of 31 minerals that the government has deemed as “critical,” although officials will initially prioritize six: lithium, graphite, nickel, cobalt, copper and rare earth elements.
The federal government has launched the strategy at a time when Canada is looking to build its own battery ecosystem to power EVs, the demand for which has increased in recent years as the world looks to accelerate the shift away from fossil fuels.
In addition, the nation, along with the United States and some of the bigger European economies, is looking to shift supply chains away from China, which dominates the EV sector, to friendlier nations amidst geopolitical concerns.
Even before Champagne proposed stricter foreign investment rules, he ordered three Chinese companies to divest their stakes in Canadian miners, citing results of a multi-step security review.
Wilkinson’s critical minerals strategy will be backed by the $3.8 billion allocated for the mining sector in this year’s federal budget. Many initiatives mentioned in the strategy were announced earlier this year.
The strategy describes locating critical minerals in Canada’s vast landmass as a “complex endeavor,” so the government will spend about $79.2 million on geoscience and exploration to better identify mineral deposits.
In addition, there’s a 30 per cent tax rebate for companies exploring critical minerals.
The document also mentions initiatives to speed up critical minerals and mining projects, which take several years to become operational. Policies include allocating $40 million to support permitting procedures, $21.5 million to help project developers navigate regulatory processes, and $1.5 billion to fund advanced projects.
“Often there are federal processes and then there are provincial processes and at times they don’t always work that well together, at times there are things that happen consecutively, that could happen concurrently,” said Wilkinson. The minister hopes conversations with provinces can cut down the time taken for regulatory assessments as well as permitting.
The government also aims to bring in more workers in the mining sector, which faces a shortage of about 113,000 workers by 2030, according to the Mining Industry Human Resources Council.
Wilkinson promised to work with Indigenous communities to make sure they are “active partners” of the critical minerals supply chain.
“Historically, Indigenous peoples have not always benefited from natural resource development,” the strategy document said. “With the majority of current and future critical mineral projects located on or near Indigenous territories, the Government of Canada is dedicated to … ensure that they benefit from these projects.”
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Pierre Gratton, chief executive of The Mining Association of Canada, a group that includes about 50 of Canada’s leading miners, said that the strategy was “very strong,” and that “clearly” shows the seriousness of the government.
Goldy Hyder, CEO of Business Council of Canada, said that while business leaders were “pleased” to see the government recognize the importance of critical minerals, there was a “lack of clarity” regarding the strategy’s mechanisms or when they would be put in place.
“Other countries … are moving far more quickly and have already secured significant positions in international supply chains,” he said. “Canada can play a major role … but only if we act with greater urgency,” said Hyder, who heads the association of about 150 companies, including Microsoft Canada Inc. and Google Canada.
Theo Yameogo, Americas Mining and Metals leader at Ernst & Young LLP, echoed a similar sentiment and said that the strategy, while holistic, wasn’t enough. He urged the need for a “stronger roadmap to clearly define a plan of action.”
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