The federal government unveiled a plan Friday intended to make it easier for mining companies to extract the minerals needed for clean technologies like electric vehicles. 

It’s part of a push from Canada, the U.S. and other western countries to ensure a steady supply of the resources, most of which are today produced by China.

It comes two days after the government announced stricter rules for foreign investment in sectors the country considers sensitive, such as those rich in data or intellectual property.

“Around the world, financial markets are increasingly pricing climate risk into investment decisions. … It is in this context that Canada can choose to be a leader,” Natural Resources Minister Jonathan Wilkinson said at a press conference in Vancouver Friday.

“The focus of this strategy will be on expanding the sector, moving things forward expeditiously, all while doing things in the right way. … We must be clear that it cannot take us 12 to 15 years to open a new mine in this country. Not if we want to achieve our climate goals.”

Here’s what you need to know:

Why it matters: Right now, mining critical minerals is financially risky and time-consuming—and with demand booming, driven by the growth of the EV industry and other technologies, the government wants to provide “greater certainty and predictability to investors, developers, communities and trading partners.” Innovation Minister François-Philippe Champagne has been busy touting Canada’s mineral suppliers to auto and battery companies in Germany, Japan and South Korea.

This strategy, and how Canada implements it, is likely to be closely watched by the country’s biggest trading partner. Joe Manchin, chair of the U.S. Senate Energy and Natural Resources Committee, has been prominent among those promoting Canada as a friendlier and efficient alternative to China’s critical-minerals supply chain, saying Canada is “ahead of us on critical minerals refining and processing, and we have much to learn from them about how they’re able to responsibly permit these activities in timelines that blow ours out of the water.” He’s pushing to fast-track stalled mining-permitting reform in the U.S. Canada’s plan is to harmonize more of its new regulations with those south of the border.

What mining companies learned today: 

• Projects focused on any of six key types of minerals—lithium, graphite, nickel, cobalt, copper and rare-earth elements—will be prioritized for federal funding, which will primarily flow through Innovation, Science and Economic Development Canada’s Strategic Innovation Fund.  
• Yet-to-be allocated infrastructure spending from the 2022 budget may go toward strategic investments in green energy infrastructure for remote or off-grid areas.
• ISED funding may go toward technology that transforms tailings—a mining waste product—or used batteries. 
• The government has “identified several Canadian regions with high potential for mineral exploration and development,” and plans to evaluate further development plans in regions with clusters of critical-minerals projects.
• The government will also “update its existing guidance on Indigenous participation in mining and its map of Indigenous mining agreements to foster a mutually beneficial climate between Indigenous peoples and industry.”
• The government is pursuing a “one project, one assessment” approach to environmental impact reports done in conjunction with provinces and Indigenous Peoples to prevent a project from being “caught” in a federal assessment, for instance, that is different from the provincial version.

What potential trade partners learned today: 

• Canada is “actively” in talks with the U.K. and South Korea on critical-mineral bilateral cooperation agreements.
• Canada is “exploring regulatory harmonization opportunities” with U.S. partners to ensure they are aligned on minerals related to entwined industries like the auto sector, and is investing in infrastructure to protect “Canada’s Arctic sovereignty.”
• Wilkinson told reporters Friday that the possibility of restricting not just foreign equity stakes in Canadian miners, but also offtake agreements, under which Canadian miners sell critical minerals to other countries, is “on the table.” He said, “We welcome foreign investments from countries like Australia, United Kingdom, United States and others, in a manner that’s actually going to promote economic opportunity for Canadians.”

The big picture: The International Energy Agency projects that reaching net zero globally by 2050, through initiatives like solar photovoltaic plants, wind farms and electric vehicles, will increase the world’s mineral requirements by sixfold by 2040. The strategy the government released Friday said it sees the need “to act swiftly in capturing the generational opportunity” posed by the surge in critical-mineral demand. 

Yet experts estimate the minerals associated with EV batteries, like lithium and cobalt, represented less than three per cent of the mining sector’s spending on exploration in Canada last year, excluding copper and nickel. Globally, it can take an average of 16.5 years to get a mine into production, according to the IEA. For Canada’s early-stage mining companies, that means long periods where they lack revenue and are more vulnerable to stock-market volatility and commodity-price swings than rivals, many of which are state-owned enterprises.

Those early-stage miners also face a potential funding gap after the government ordered three Chinese companies to divest from Canadian lithium miners last month. Changes to the Investment Canada Act earlier this week tightened some foreign-investment rules.

The industry has hoped streamlined permitting and federal investment commitments will help fill the gap—and swiftly make Canada’s mining industry more competitive. 

What’s we’re still waiting on:

• New monetary commitments. Friday’s announcement provides some details of how the government plans to roll out the up to $3.8 billion in spending telegraphed in the 2022 budget, but it doesn’t include any new financing. 
• The strategy provides no plan to stockpile critical minerals—a tactic more countries are expected to use to secure steady supplies. 
• After a recent report raised questions about federal support for mining in the critical mineral-rich Northern Ontario peatland region dubbed the Ring of Fire, the strategy acknowledges that “concerns have also been raised” about the peatlands and the need for “measures to mitigate” environmental harm. But it did not directly deliver a verdict on the future of Ring of Fire development. 

“There may be pathways through which you protect the areas that are peat … ideally on a permanent basis,” Wilkinson said at the press conference. “There are many proposals for mines in Ontario and in other parts of the country that are far closer to realization than the Ring of Fire.”

• The government has punted next steps on permitting Regional Energy and Resource Tables. The government has said it wants to have regional tables established with every province and territory by early 2023, then joint action plans will be developed over the following two years.
• It has also deferred discussions about safety and equitable benefits for Indigenous women, girls and 2SLGBTQQIA+ people to a roundtable that will convene this year or next year “with Indigenous and industry partners, including the mineral and metal sectors.” 

The reaction: 

“It is arguably the most significant industrial strategy the country has seen in decades,” Pierre Gratton, the Mining Association of Canada’s president and CEO, said in a statement Friday. 

Michael Goehring, president and CEO of the Mining Association of BC, told The Logic the plan is ambitious. 

“We have several years here in Canada to demonstrate to our allies and global investors that we can execute on the strategy, and that we can deliver at each stage of the value chain. I think we’re ready to do it.”

Sharleen Gale, chief of the Fort Nelson First Nations and chair of the First Nations Major Projects Coalition, said at Friday’s press conference that the government could “go even further” to ensure that Indigenous nations are approached as early as possible in critical-minerals projects and that they always include an option for First Nations equity.

Goldy Hyder, president and CEO of the Business Council of Canada, said in a statement that the council applauded new plans to speed up and fund critical minerals. But, Hyder said in a statement, “What concerns us is the lack of clarity in terms of defining what those mechanisms will be or when they will be put in place and yield results.”

With files from Aleksandra Sagan in Vancouver