Moving Forward: Developing the Mines, Metals and Minerals Industry

With its globally leading mining industry, Canada is well placed to take advantage of the growing demand for critical minerals, which will power the transition to clean energy and new forms of advanced manufacturing. The federal government has announced that it aims to foster the development of globally competitive supply chains for critical minerals, products and technologies, including a ‘mines to mobility’ strategy for battery manufacturing that will power electric vehicles (EVs) made in Canada and elsewhere.

However, time is of the essence and Canada will need to significantly increase its investment in upstream production if it is to capitalize on the growing demand for cobalt, lithium, graphite and nickel for battery manufacturing. Investments also will be needed to ensure that Canadian aluminum production – which has the lowest carbon footprint in the world – can take advantage of rising demand for aluminum in automotive and aerospace applications, particularly in the face of fierce competition from low-cost producers in China, India and Russia. The potential for trade tensions with the U.S. may also hinder industry development, with the aluminum and steel tariffs spat during 2018-19 leading to significant revenue volatility, while more recent Buy American initiatives have threatened Canadian salt exports.

The question of how the industry will contribute to meeting Canada’s 2030 emissions targets also hangs over the future of mines, metals and minerals development. While the industry has a relatively low carbon footprint compared to its global competitors, emissions continue to trend upwards and account for nearly 5% of total Canadian industry emissions. The challenge of developing future projects in light of Canada’s climate commitments is particularly pressing for off-grid mines, which provide a significant proportion of our critical mineral supply, and which currently rely on fossil fuels to meet their energy demands. Without new electrical infrastructure or rapid advances in delivering high density energy (such as hydrogen) to replace diesel, the feasibility of such projects will be in doubt as carbon pricing and other emissions-related penalties erode their profitability.