Like Australia, Canada Should Cut Red Tape in Critical Minerals Industry: Analyst

Teck’s Highland Valley Copper mine in the British Columbia Interior in a file photo. Copper has been identified as a critical mineral for Canada. (The Canadian Press/Jonathan Hayward)

Canada does not have enough reserves to become a major world player in the growing critical minerals industry, says analyst Jack Mintz. But it might have enough for domestic needs.

And Canada’s mining industry has one of the greatest prospects for growth in the world, he says—if the regulatory environment improves.

The permitting process in Canada can delay projects several years longer than other countries, Mintz told The Epoch Times. “Proponents now have to provide information on what impact their project is going to have on gender issues and climate change and all sorts of other things,” he said. “We shouldn’t expect the regulatory system to deal with issues that are really not relevant to development.”

Direct environmental impacts and indigenous land rights are relevant to development, he said. But many other governance issues shouldn’t be involved.

Mintz is the President’s Fellow of the School of Public Policy at the University of Calgary. He is also chair of the Alberta Premier’s Economic Recovery Council. He coauthored a report published Dec. 6 comparing Canada’s critical minerals industry to the rest of the world. His coauthor was Philip Bazel, also of the School of Public Policy.

With electric vehicle mandates in British Columbia, California, and elsewhere, demand for critical minerals is expected to double worldwide by 2040, according to the International Energy Agency. These minerals, such as lithium, are necessary to produce batteries for the vehicles.

Mintz and Bazel conclude in their report: “Canada’s participation in the energy transition mining market may hinge on the shape of its regulatory and taxation framework for mining companies.”

Australia’s Example

Australia is a role model for its good regulatory system, Mintz told The Epoch Times. “They’ve separated a lot of these what you might call more ‘political’ issues from the technical issues involved with the projects,” he said.

In Australia, many of the environmental, social, and governance (ESG) considerations are made all at once for a large area of land and the cities or towns within it. Then when individual projects come along, there’s a streamlined process to get them in place.

Mintz used the example of liquified natural gas (LNG) plants to illustrate how uncompetitive Canada is due to slow permitting.

Much as the world is soon expected to urgently demand critical minerals, right now “the world is desperate for liquified natural gas,” he said. Canada’s first LNG plant is due to complete construction in 2027. “We’ve been talking about LNG for years,“ Mintz said. ”During all that time, Australia’s now got five LNG plants [and] export terminals. The United States has six or seven now. We don’t even have one.”

“Imagine building a lithium plant in B.C. with the kind of process we have, compared to building a lithium plant in a country where reserves are more abundant and permits are much easier to do,” Mintz said.

Canada’s Reserves

Canada has the most of these critical minerals: nickel, zinc, cobalt, and copper. Canada currently produces 6.7 percent of the world’s nickel, according to Mintz and Bazel’s report, but it only has 2.1 percent of the world’s reserves.

Mintz and Bazel prioritized reserves in their analysis to show the longer term prominence of countries in the industry. Reserves are resources already determined to be economical to mine.

Canada falls far short of Indonesia and Australia, which have the largest nickel reserves, each at about 22 percent of the world’s share.

Canada measures up similarly for the other minerals, representing less than three percent in both reserves and current production for each. Zinc production is the only other exception, with Canada currently producing 6 percent of the world’s zinc. At current production levels, Canada would deplete its reserves in eight years, Mintz said.

However, he added, changing circumstances could make previously uneconomic reserves more viable.

Although Canada has less than three percent of the world’s share for most of the minerals, that might be enough for domestic use. “To give a rough comparison, Canada’s GDP is about 3 percent of world GDP,” Mintz said. “So if we’re producing about 2 percent of copper, we may have enough to meet our own needs. But we won’t be a big exporter.”

Canada does, however, have a significant global presence in foreign mining investment, he said. Canadian companies such as Teck Resources Ltd. and Barrick Gold Corp. have global reach.

Mintz and Bazel’s report found that, “although Canada does not possess large quantities of critical minerals relative to global totals, Canadian reserves of cobalt, copper, nickel and zinc represent the best opportunities for growth.”

The report listed Australia among the top countries for its reserves of most critical minerals. China is among the top countries for graphite and zinc reserves. But even when China didn’t appear on the list for some minerals, said Mintz, it’s not because China doesn’t have a big piece of the pie.

China has invested heavily in Africa, particularly the large cobalt industry in the Congo, Mintz said. China is also producing electric batteries and building electric vehicles.

Future of Electric Cars, Energy Transition

Whether or not consumers and carmakers are ready for it, Mintz said, “governments are mandating us to have electric cars ... so you may have no choice.” But other technological advancements may come along, including batteries that don’t rely on these minerals.

It’s hard to predict what will happen in the coming decades, Mintz said. “In 1913, did people expect that in the next 30 years there would be two world wars and a Great Depression?”

An energy transition has great implications for Canada’s oil and gas industry, Mintz said, and it seems the critical mineral industry will not be able to replace it.

While Canada’s regulatory system needs work, Mintz said, he and Bazel found that “Canada has the most tax competitive system for mining than any other country.” Mintz said they did not, however, factor in any carbon tax. They will soon publish a companion report focused on the issue taxation in relation to mining critical minerals.