Canada faces midstream minerals barriers

Developing refinement capacity is a "once-in-a-generation" opportunity, panel says.
Canada faces midstream minerals barriers Canada faces midstream minerals barriers Canada faces midstream minerals barriers Canada faces midstream minerals barriers Canada faces midstream minerals barriers

Canada will need to develop refining capacity quickly in order to compete.

The Canadian government must develop a strategy to source and refine critical minerals to meet growing geopolitical and demand challenges, panellists heard at an online event hosted by law firm Fasken.

In the session focusing on developments in the electric vehicle sector, and their impact on the Canadian mining industry, panellists reflected on how geopolitical trends might impede Canada's development of its critical minerals sector.

"We need to have our own strategy and have our own mines, and collaborate with the US and the EU, and counteract with measures and initiatives to make sure that we do develop an industry," Daniel Breton, chief executive of Electric Mobility Canada, said.

"China has been ahead of the curve on this for almost two decades, and we have some mines that were open in the US and in Canada but closed because we can't compete with [China's] low prices.

"We have no refineries," he added. "We need a strategy, and we need it to be implemented quickly. Things are evolving so quickly these days. If we keep talking about it for another two to five years, it will be too late. We need to write a strategy and implement it."

Too often in Canada's history, Canada has been content to extract critical minerals, allow them to be refined elsewhere, and be sold back to Canada at a higher cost, he said.

"We need to make sure we don't make the same mistake, that we've been making for centuries," Breton said. "This is a once-in-a-generation opportunity."

David Adams, chief executive of industry group Global Automakers of Canada, said U.S. policies designed to nurture the country's own critical minerals supply chain might make it harder for Canada to develop its own.

"This idea of building a fortress around the U.S. [in terms of their mineral development plan] doesn't help Canada," he said.

The Canadian and the U.S. government will need to reach an agreement to develop these supply chains together, he added.

"The U.S. wants all their battery production and electric vehicle production in the U.S.," he said. "On the other hand, they want a green secure and stable source of raw imports - Canada could be a significant provider of these. That's where our governments need to have discussions."

He said Canada faced a difficult position in the current geopolitical climate.

"I don't think it's anything in particular against Canada" regarding the U.S. desire to build its own supply chain, he said. "Canada is just caught in the crossfire of broader geopolitical struggles between the U.S. and China."

Adams wonders how Canada's higher-quality production and regulations will affect prices of Canadian goods.

"If we look through the lens of how important it's going to be to have ethically mined minerals, and ethically sourced steel…the green-sustainable focus often costs more," he said.

"That's where the real rub is going to be through the whole supplier network and in production of electric vehicles. It will come with higher costs, and come down to the battery cost at some point in the future."

The Canadian mining industry will need to find a way to be fairly compensated for its mining products, Bob Oliver, chief executive of hydrogen-focused organisation H2Go Canada, said.

"How do we ensure that Canada is getting fairly compensated for its higher standards, relative to some of the other more lax jurisdictions?" he said.

"It may be that the capital markets are a big driver of this," he said, adding that capital markets are the big drivers when it comes to ESG implementation in companies. "These markets may demand low-carbon intensity steel, ethically-sourced cobalt, or place a premium on acquisition of these materials that may play to Canada's advantage.

"It's about having a strategic approach to monetise and ascribe strategic value" to these assets, Oliver said. "That's a critical step."

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