The Canadian Government’s Standing Committee on Natural Resources presented a plan to the House of Commons this month. The document can be found here, and seems like pretty good news for the Canadian mining industry. Here are the five recommendations the committee made to the House of Commons regarding overhauling the Canadian mining industry, supply chains, and reducing dependence on foreign markets. The recommendations are much more in-depth on the site, so take some time to read them. I have summarized what I feel are the most important points below:
The 5 Recommendations From the Canadian Standing Committee on Natural Resources
1. Establish an office of Critical Minerals
The plan’s recommendation page describes the need to create a Critical Minerals office in the government. This would be similar to what Australia established: The Australian Critical Minerals Facilitation Office. The goal of this office is to support the Australian mining sector by helping companies secure funding. The Canadian Standing Committee on Natural Resources wants to create this office in order to secure financing for Canadian companies at home and abroad. Essentially, this means the government wants to help junior miners and exploration companies by getting funding. The implications for the Canadian resource sector are staggering! The recommendation states:
“(That the gov’t work with provinces, Indigenous communities and the mining industry by…) Assessing the benefits of establishing an office of critical minerals within the Government of Canada, made up of multidisciplinary experts who would work on developing critical mineral supply and value chains;”
2. Support the Canadian Mining Sector with a Mineral Exploration Tax credit & Improving infrastructure to remote regions
By providing tax incentives via a Mineral Exploration Tax Credit, the gov’t wants to facilitate investment into exploration. This is to focus on evaluating Canada for additional mineral potential has yet to be realized.
3. Developing initiatives to make the mining industry more sustainable by promoting waste recovery and mineral recycling…
“(That the gov’t work with provinces, Indigenous communities and the mining industry by…) launching a roadmap for the integration of renewable and low‑greenhouse gas energy into off-grid mine energy systems in remote and Northern regions, taking into account reliability and cost;”
This is sure to have an effect on companies involved in electrification processes and waste management sectors, to name a few.
4. Supporting the development of value-added processing and using a Mineral Exploration Tax Credit to add incentives for value-added processing initiatives.
Value-added processing is the way to get critical minerals to market, and this plan is all about improving critical mineral processing in Canada by supporting facilities with infrastructure help and tax incentives.
5. Focusing on sustainability through ‘decarbonization.’
The world is jumping on Electric Vehicles and this Natural Resources Comittee report echoes this sentiment. One really big thing resonated from Recommendation 5:
(Support industries by…) developing a strategic and coordinated approach to electrifying transportation in Canada, including dedicating budgets to building a Canadian electric vehicle battery industry and ensuring access to an adequate domestic supply of the critical minerals needed for their manufacture;
While the study is not set in stone, it really outlines the Canadian government’s desire to bolster the mining industry and to allow it to compete with foreign markets. China dominates the critical minerals market worldwide by processing 80% of the global capacity for rare earth metals.
It is absolutely critical that Canada secures a supply of rare earth metals. One of the main reasons for this is Canada’s notoriously great reputation for Environmental and Social Governance practices in all industries. If the goals of this study come to pass, the Canadian mining industry has the ability to be a leader in making mining more sustainable worldwide.
Improving US-Canada Relations Could Help Too
The relationship between the US and Canada is also turning for the better with the ramp down of the pandemic. The US mining sector, which is known for world-class operations in places like ones in Nevada, is eager to work with Canada. Renewed optimism from the Canadian gov’t about the Biden Administration led to a Roadmap for a Renewed US-Canada partnership. Also, Mexico is not exempt from the conversation and I’m sure their industry experts would want to weigh in. In the summary of this strategy on PM Justin Trudeau’s government page, a specific quote about supply chains may resonate with people involved in mineral markets:
The leaders also agreed to work together to build the necessary supply chains to make Canada and the United States global leaders in all aspects of battery development and production. To that end, the leaders agreed to strengthen the Canada-U.S. Critical Minerals Action Plan to target a net-zero industrial transformation, batteries for zero-emissions vehicles, and renewable energy storage. –Roadmap for a Renewed U.S.-Canada Partnership
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