How Canada could quickly develop critical minerals  

Canada is rich with critical minerals, and demand for them is soaring — they’re essential components in everything from defence technologies to EVs to green energy. 

But there are big challenges ahead. Funding these resource projects and getting critical minerals out of the ground is a tough, risky and expensive business. Ramping up a new critical minerals industry will not happen overnight — and likely not as fast as governments might expect.  

We’ve gathered insights from experts about the current state of the industry, its strengths and weaknesses and how Canada could speed development of critical minerals.  

Canada has a big advantage 

On a recent episode of PPF’s podcast WONK, Sean Boyd, the chair of Canada’s largest miner and the world’s second largest gold miner, Agnico Eagle, explained that this country’s mining experience and expertise are an essential starting point.  

“Without the gold industry and where it stands today in Canada and the strong foundation it’s built and the relationships it has and the skill sets and experience it has, without that, there is no critical metals business in the future, given where we operate and how we operate.”  

This is a point that may be taken for granted by governments in both Canada and the U.S., where there seems to be “an unrealistic expectation” about how quickly a critical minerals industry could be ramped up in North America, Boyd told WONK host Amanda Lang.   

“I’ve sat in meetings in Washington where I’ve been told that they’re getting Greenland and they know what they’re going to pay for it. And I said, well, that’s interesting. We kind of know why they want it, but the impression is there’s lots of critical metal deposits for them to build there. I said, no, there isn’t, because if there were, they’d be built already. So, there’s a real mismatch between how quickly politicians think we can ramp things up and the realities on the ground for mining companies.” 

In a recent PPF policy memo, titled Mission: Critical Minerals, author and PPF Fellow Mark Cameron notes that Canada is home to nearly half of the world’s publicly listed mining and mineral exploration firms and has deep expertise in finding and developing mineral projects.  

“On top of this, it has strong environmental and labour standards, which can make Canadian critical minerals attractive to buyers seeking ethically sourced inputs,” writes Cameron.   

Infrastructure is everything 

Mining can be a risky business that requires huge capital investment. Operating in remote areas like the North means building roads and supporting communities.  

“Many of these [deposits] still need to be discovered, but you’re not going to get to them unless you’re building infrastructure, investing. It’s much easier to find these things once you’ve built out more production bases in the far north because it’s cheaper to explore. That still has to be worked out,” said Boyd. 

As PPF’s critical minerals report notes, “Until road, rail spurs and grid connections are planned in a strategic way, many promising deposits will remain inaccessible.” 

And just because Canada is rich in critical minerals, that doesn’t mean finding winning projects will be simple.   

“Just because the government invests whatever number they’re going to invest in the North, there’s not a lot of critical metals deposits that are going to pop up,” Boyd said. “Now, I’ve been warning the government, be careful because this is mining. And a lot of projects come out of the bottom drawer, they’ve been sitting there for decades, they get all dusted up and they’re presented to government and bureaucrats and sometimes the government and bureaucrats don’t know which way is up on these projects.”  

Governments will need to step up

Government support will have to play a role in developing the industry. “You used to be able to build a mine for a couple hundred million dollars, then it was half a billion, then it was billions. Now it’s multi-billions. And it’s getting tougher,” said Boyd. “Governments around the world may realize it now — they haven’t realized it over the last few years — they need to be partners in some of these projects because it’s in their strategic interest.” 

The government could consider co-investing in projects or providing low-cost financing to reduce the burden on private developers, suggests Cameron in the PPF memo. “Canada has already taken steps in this direction: the Strategic Innovation Fund and the Critical Minerals Infrastructure Fund ($3.8 billion) are being used to directly invest in enabling infrastructure and even take equity stakes alongside private or allied investors. Expanding such co-investment programs would spread risk and attract more capital into the sector.” 

He also suggests loan guarantees, tax incentives and other innovative financing supports. 

A new report from the Canadian Climate Institute also suggests that governments take equity stakes in critical mineral projects to help overcome the financial risks. “As equity holders, governments can provide the capital that private markets won’t, sharing both the downside risks and the upside potential of projects in the face of long payback periods,” it reads.  

Canada could also do more to promote exploration, says PPF’s landmark report Build Big Things: A playbook to turbocharge investment in major energy, critical minerals and infrastructure projects. It could broaden “the scope of government tax incentives and financing programs to explicitly include critical minerals.” It could also remove barriers to immigration and foreign credential recognition to ensure labour availability. 

Developing critical minerals is one of 10 essential plays in the Build Big Things report, outlining how to drive public and private sector action and accelerate nation-building projects.

Indigenous partnership and community trust 

“The path to advancing major energy, mining and infrastructure projects in Canada increasingly runs through meaningful partnerships with Indigenous communities and rights-holders,” notes the Build Big Things report.  

“The most crucial aspect of Indigenous participation is the one that has too often been missing in energy, mining and infrastructure projects: mutual trust. As one expert told us, Indigenous participation can only ‘move at the speed of trust.’” 

Boyd outlined how building trust with communities needs to be at the centre of any strategy. “At the end of the day, each project has its unique attributes and opportunities and risks and challenges, but I think it’s the trust that sort of lays the foundation to get the right result with individual projects, and it comes down to respect.” 

The Build Big Things report says that Indigenous participation needs to go “far beyond” consultation and extend to economic participation and equity partnerships. 

Miners can also help the government

Boyd said there are ways the government could lean on industry for advice about where to invest. “If I was the new government, I would go out and I’d get together half a dozen senior mining people that have been around that don’t really have a vested interest — not current CEOs, because then you’re going to just get moved in certain directions — but people that actually know how to get things done and can step back and look collectively at the opportunity set.” 

While this might look like picking winners and losers, that’s what resource development is, he said. “You’re actually looking at geology and you’re trying to understand, well, where’s the best opportunity? And how can you actually take geology and build a business that’s going to last for multi-decades?”  

Yes, big projects can be built quickly 

Building big things quickly is where expertise comes into play. “Once you get the green light to build and you get a satisfactory rate of return, the private sector can move quickly,” said Boyd.  

“We can actually build a multi-billion-dollar project in Canada’s far north in two to three barge seasons. And that’s logistical capacity that doesn’t exist in the government. And we’re telling them that. And we’re telling the Canadian military that. We’re telling them some of our logistical feats that we do in terms of managing diesel shipments and how we build infrastructure.” 

Process critical minerals at home 

China currently has a big advantage in its ability to process critical minerals. It refines roughly 90 percent of rare earths and 60 to 70 percent of global lithium and cobalt. “Such concentration leaves the world exposed to supply disruptions or export restrictions,” writes Cameron.  

Because of its processing power, China has also been able to invest aggressively abroad in critical minerals.  

PPF’s Build Big Things report says that developing Canada’s critical minerals should include value-added processing in Canada “to capture the full value of critical minerals and ensure reliable supply.” 

“When Canadian mining was at its peak, Naranda, Falcon Bridge, Inco, Alcan, all had processing facilities,” said Boyd. “So at some point North Americans have to decide if this is really that important. We may find the deposits and have the deposits, but are we going to process them here? And that should be part of the discussion and clearly part of the strategy.”