Mining minerals

Canada’s mining in dire straits

The strategy, which Parliament has yet to formally implement, will cover 31 critical metals and minerals needed for energy transition, defence, aerospace, communications and high technology. The BC government should also develop a critical metals strategy.

The goal of the federal strategy is not only to secure a national supply of critical minerals, but also to develop a comprehensive supply chain, which may include developing greater capacity for refining, smelting, manufacturing and recycling.

“The opportunity for British Columbia is tremendous,” said Michael Goehring, president and CEO of the Mining Association of British Columbia.

“I see this as a generational opportunity for the country and for the province,” said Gavin Dirom, President and CEO of Geoscience BC. “This type of funding has not been allocated to a geoscience undertaking or mining period since the 1990s.”

The US also has a Critical Minerals Strategy, and the Canada-US Joint Action Plan on Critical Minerals Collaboration could lead to US investments in Canadian critical minerals projects.

Some of the funding is expected to go to government geoscience agencies like the Geological Survey of Canada and Geoscience BC to develop critical mineral mapping.

Geoscience BC is collaborating with LithiumBank Resources (TSX-V: LBNK) and Natural Resources Canada to develop a database of oil and gas brines in northeast British Columbia that contain lithium. Geoscience BC is also investigating the potential of coal mines to produce rare earths.

A major financial incentive in the federal budget is a 30% mineral exploration tax credit for critical minerals.

Demand is growing

The International Energy Agency (IEA) estimates that the demand for critical minerals will increase sixfold by 2040. Battery metals (graphite, aluminum, copper, nickel, manganese, lithium and cobalt) are in particular demand.

For copper alone, there will be an estimated annual supply shortfall of 4.7 million tonnes by 2030 worldwide if no new mines are built. Meeting that demand will require 35 more copper mines the size of the Highland Valley copper mine in British Columbia in eight years, Goehring said.

Few countries are as vast and rich in minerals as Canada, so critical mining opportunities are significant, provided federal and provincial governments and Indigenous peoples can provide the right investment and regulatory environment. .

British Columbia is Canada’s largest copper producer, the only molybdenum producer, and although it does not currently produce nickel, it has in the past, and there are now two nickel projects at the early stage of exploration and development in British Columbia.

Ontario, Quebec and Newfoundland have significant nickel and cobalt deposits, Saskatchewan has the largest high-grade uranium resources in the world, and Alberta and British Columbia have the potential to produce lithium extracted from oil field brines. As for Canada’s North, the Northwest Territories has “just about everything, if you can get to it,” said Pierre Gratton, president and CEO of the Mining Association of Canada. “There really isn’t a place in Canada that can’t be part of this strategy.

The problem for Canada, the United States and Europe, all of which are developing critical mineral strategies, is that no amount of money can save time.

Emission reduction targets set by many governments will require so much copper, cobalt, nickel, lithium and other critical metals for things like electric car batteries and wind turbines that the new mines needed to supply the raw materials will probably not be able to be built in time to meet the objectives.

It takes 10 to 20 years to bring a mine from discovery to production, not only in Canada, but also elsewhere.

“We need to up our game and streamline our clearance process and make decisions faster,” Goehring said. “Mines have long lead times, and if we’re not able to improve our permitting processes and we don’t engage [First Nations] more significantly, we will miss this opportunity. I think policy makers are beginning to understand this challenge and are turning their attention to it. »

While the details of the Federal Critical Minerals Strategy will not be fully known until it is formally approved by Parliament, direct government investment in the form of equity or loans is expected. – “patient capital”, Gratton calls it – in certain types. mining and processing, such as rare earths.

“Where you hear the most about direct government involvement is in rare earths,” Gratton said. “Because for rare earths, China controls the market. It used to be that whenever the Chinese perceived a threat, they flooded the market, prices crashed, mine went bankrupt.

“It’s a very difficult market to enter because China controls it. They control the price and they are state enterprises so they don’t care about profit. They have these mines in China and elsewhere for strategic reasons. And we compete with that.

Rare earth elements such as neodymium, dysprosium and praseodymium are essential in the manufacture of smartphones, magnets, computer hard drives, television screens and electric and hybrid vehicles.

Goehring said there was an urgent need to develop new mines, so governments will need to streamline permitting processes.

“We’re four, five, six years old, and these supply chains are starting to form, and we need to bring Canada into this supply chain,” he said.

“We need Ford [NYSE:F] – all North American automakers – to use Canadian battery metals in their batteries.

He added that it will be essential to provide First Nations with funding to help them develop the kind of capacity that First Nations like the Tahltan have developed. This capacity is needed if First Nations are to navigate complex environmental permitting processes and become participants and even equity partners in new mining projects.

“A key thing is that we need to provide more funding to Indigenous partners to improve their participation in the Impact Assessment Act and other regulatory processes so that the nation fully participates,” Goehring said. “Because it’s a roadblock. Policymakers are really going to have to address this challenge quickly. »

In addition to a number of major new copper mining projects in British Columbia, such as the KSM project and the Highland Valley expansion, there are four critical mining projects in the early stages of exploration and development in Columbia. -British. They understand :

• Aley, niobium, Taseko Mines Ltd. (TSX: TKO)

• Turnagain, nickel sulphide, Gigametals Corp. (TSX-V: GIGA)

• Decacar, nickel, FPX Nickel Corp. (TAX-V:FPX)

•Wicheeda, light rare earths, Defense Metals Corp. (TSX-V: DEFN)

(This article first appeared in Business in Vancouver)