Accelerating and enhancing the extraction of essential minerals is crucial, as per a recent study, for Canada.
Getting a Piece of the Critical Mineral Pie: Canada's Quest for $52 Billion Investment by 2040
By 2040, Canada needs to invest between 30 and 65 billion dollars to cash in on the abundant economic opportunities associated with critical minerals, according to a report by the Canadian Climate Institute.
In the race to secure these valuable resources, the independent organization suggests swift action to unlock public and private investments, enabling Canada to access the fundamental components of clean technologies for a successful energy transition.
Crucial for a wide array of products, from smartphones to hockey sticks, critical minerals are also indispensable for energy production and storage, such as solar panels and electric vehicle batteries. With the world experiencing significant geopolitical shifts, these minerals are hot commodities, spurring many desires for control.
The global demand for critical minerals is projected to double by 2040, reaching a staggering 770 billion dollars, with Canada's national demand expected to exceed 16 billion dollars yearly, primarily due to the growth of the battery sector.
Investing Big for a Cleaner Future
Marisa Beck, the research director at the Canadian Climate Institute, states, "To maintain its position in the race for critical minerals, Canada must act quickly and mobilize investments that will enable it to achieve its energy transition by providing access to the core components of clean technologies." She advocates that governments seize this opportunity.
Canada will need to invest between 30 and 65 billion dollars over the next 15 years to capitalize on its mining capabilities if it wants to meet its domestic demand. These investments could stimulate the development of more than 30 new mines, according to the institute, focusing on six critical minerals, such as copper, nickel, lithium, graphite, cobalt, and rare earth elements, where Canada has significant reserves.
As per the report, Canada has barely tapped into its vast reserves. For instance, in 2024, Canada extracted only 0.6% of its lithium reserves valued at 120 billion dollars. The same pattern holds for graphite (10 billion reserves, 0.02% produced) and cobalt (8 billion, 2.6% produced).
Inaction could lead to an annual loss of 12 billion dollars by 2040, the report explains.
Further Reading
- China's Rare Earth Deposits, Beijing's Trump Card
- Quebec Wants to "Accelerate the Pace" of Critical Mineral Exploitation
To boost the critical minerals sector, the federal government should establish an independent financial institution tasked with preparing or expanding financial risk-sharing agreements. This would help share the risks associated with volatile critical mineral prices with investors, such as through capital investments, difference contracts, or operating agreements.
Moreover, the report emphasizes that the critical minerals sector can only thrive with the active participation of indigenous communities. Federal and provincial governments should support First Nations communities in exercising their right to self-determination and economic participation in extraction projects.
Finally, provincial governments should strengthen mining regulations to minimize environmental risks, protect Canadian communities, and ensure a reliable supply.
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Source: Canadian Climate Institute
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The Canadian Climate Institute's report highlights the need for Canada to invest heavily in critical minerals by 2040 to meet projected demand for these essential components for clean technologies, considering that the global demand is expected to double by that time. The report recommends immediate action in investing, focusing on integrated mining, mineral processing, and clean tech manufacturing, alongside proactive policy and regulatory measures to strengthen Canada's position in the race for critical minerals.
The Canadian government should take immediate action to unlock investments, as suggested by the Canadian Climate Institute, in order to invest between 30 and 65 billion dollars over the next 15 years to capitalize on Canada's mining capabilities and meet its domestic demand for critical minerals. This investment would stimulate the development of more than 30 new mines, focusing on key minerals such as copper, nickel, lithium, graphite, cobalt, and rare earth elements. (Finance, business, government)
Furthermore, for the critical minerals sector to thrive, the federal government should establish an independent financial institution to share risks associated with volatile mineral prices with investors. The participation of indigenous communities, along with stronger mining regulations that protect Canadian communities and the environment, are also essential for the sector's growth. (Finance, business, government)
