If Canada wants more battery metals, why is our production of nickel dropping?
The country’s copper and nickel production declined last year for the fourth consecutive year, according to S&P Global Market Intelligence. Mineral exploration budgets in Canada fell nine per cent from 2022’s decade high, the research firm said—more than the global average. It takes an average of 17.9 years between when a metal deposit is discovered in Canada and when a mine starts producing, also above the global average of 15.7 years.
Yet, as my colleague Murad and I reported last week, Canada’s government hopes to see a fivefold increase in critical mineral mining by 2035 to support the domestic EV battery industry, including a total of five graphite mines, five lithium mines and eight nickel mines.
“As global demand for critical minerals skyrockets, Canada will be extremely well positioned,” Natural Resources Canada communications adviser Michael MacDonald wrote to The Logic last week in response to our story.
Heather Exner-Pirot, special adviser to the Business Council of Canada, said it’s not clear that global demand actually is skyrocketing just yet. Chinese-owned nickel companies in Indonesia are flooding the market and slashing prices; mining investors are clinging to fossil fuels; lithium miners are pausing plans for new Canadian mines, saying there isn’t enough demand for EVs.
Sean De Vries, executive director of the Battery Metals Association of Canada, said Canada is doing something right. The zero-emissions vehicle sales mandate—which requires 100 per cent of new passenger vehicles to be zero-emissions models by 2035—helps lock in battery-metal demand for beleaguered miners. Eric Desaulniers, CEO of Nouveau Monde Graphite, said that the process to get a permit for a new mine in Quebec took less than two years.
Canada also has lower litigation risks than the U.S., S&P analysts have reported.
“Canadians are viewed as being very diligent. Rarely do we have a case where people go through a permitting process and then we change our mind,” said Theo Yameogo, Americas and Canada mining leader EY. “It looks long, but in a world where sustainability and environmental stewardship is super important, it’s hard to tell the government that they need to make it shorter.”
But if the government wants to streamline, industry has ideas. De Vries suggests more provinces designate a single caseworker or team that guides a company through the permitting process.
Desaulniers said Canada should match U.S. policies requiring domestic production to qualify for EV incentive programs and avoid tariffs, which pushed General Motors and Panasonic to make deals with his company, helping it ride out market uncertainty.
Exner-Pirot suggested that Canada investigate strategies for stockpiling critical minerals. Meanwhile, she said, Canada should avoid conflicting policies like raising the capital-gains inclusion rate, which offset some of the other tax incentives for mining investments.
China spent years amassing critical minerals for its EVs. The Canadian government has been clamping down on Chinese mining investments in Canada to try and build up the country’s own supply chain, and recently added stricter conditions to other foreign investors, like Switzerland’s Glencore.
Yameogo noted that while it is tempting to mirror the nationalism of economic rivals like China, Canada shouldn’t totally cut off foreign investors in the name of self-sufficiency. Partnerships that uphold high environmental standards might make more sense than trying to beat China at its own game, he said.
“Government can do better,” he said, “but not necessarily become nationalists.”
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