Canada is nearing a national security decision that will affect the mining sector.
In the “coming months,” the federal government will release a new list of minerals it deems a high priority for the country’s economic security, The Logic has learned.
Natural Resources Canada confirmed the timeline after The Logic acquired documents under access to information law that revealed some of the government’s thinking on what minerals could be included.
A host of players in the battery metals business are awaiting the announcement. Inclusion on the list could unlock millions of dollars worth of trade deals and incentives for Canadian companies working on projects that would fill gaps in the EV and cleantech supply chains.
Why it matters: Canada has tried to boost its supplies of certain minerals amid projections that demand will boom for materials used in electronics, EV batteries and the like. For instance, the International Energy Agency estimates a typical EV requires six times the mineral inputs of a conventional car.
Canadian companies working to produce critical minerals could be eligible for a 30 per cent Critical Mineral Exploration Tax Credit and over $192 million pool of R&D funding. It also puts them on the radar of potential trade partners, with Japan, the U.S, Mexico and the U.K. working on agreements over the last year to collaborate with Canada’s critical mineral industry.
The volatile world of critical-metal mining has changed considerably since Canada released its first list in 2021. Automakers have slowed EV production plans, there have been dramatic supply and demand swings, and China has imposed new restrictions on critical mineral exports.
John Passalacqua, CEO of First Phosphate, which is developing a project in Quebec, said automakers’ growing adoption of lithium-iron-phosphate battery formulations in the last couple of years has changed the phosphate market, which had been mostly geared to traditional uses like fertilizer.
“Phosphate is a really critical element, because it’s not only food security, but it’s also battery security,” he said.
The contenders: An October 2023 memo signed by deputy natural resources minister Michael Vandergrift suggested that silicon, alumina, direct reduction iron ore and phosphate were among the minerals that industry was pushing to add to the list. The document, which my colleague David Reevely received in an access-to-information request, also says “it is also possible that minerals will be dropped.”
The memo also lists updated criteria for the list, which currently includes 31 minerals, 21 of which are already made in Canada. New criteria under consideration could require minerals to both have a threatened supply chain and have a reasonable chance of being produced in Canada in the near to medium term, the memo said, in addition to existing criteria that focus on green-transition metals and important minerals for allies.
What’s happened since then: The memo suggests the government was hoping to have its new list ready this month to coincide with the Prospectors & Developers Association of Canada (PDAC) convention. But Natural Resources Canada communications advisor Shireen Ali said officials are still “diligently reviewing all submissions” to a consultation that ended Feb. 16.
Jeff Killeen, PDAC’s director of policy and programs, said that it has been in active and recent consultation with the government around the criteria and doesn’t anticipate the updates to the list will be substantial. “We hope the federal government is consistent in their approach to this strategy,” Killeen said in an emailed statement.
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