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Officially released in Vancouver by Natural Resources Minister Jonathan Wilkinson, the 52-page document outlines the government’s plan for Canada to “become a global supplier of critical minerals and the clean digital technologies that enable them.”
Of a list of 31 critical minerals in Canada, the strategy prioritizes six because of their economic growth potential and status as inputs to supply chains: lithium, graphite, nickel, cobalt, copper and rare earth elements.
It also focuses on five segments in the critical minerals value chain: geoscience and exploration; mineral extraction; intermediate processing; advanced manufacturing; and recycling.
To build competitive value chains in Canada, the stages of the industrial process must be integrated, and everything can be built domestically, so that mineral resources are not simply exported for processing before being re-imported as final products, the strategy says.
Certain value chains with the greatest potential for such integration include clean technologies such as zero-emission vehicles, communications technologies, and advanced manufacturing such as permanent magnets. Those chains also have great potential for economic growth, the strategy says, although government funding would help develop critical minerals needed for their end products.
The document does not identify any new funding streams not already listed in the 2022 budget.
Areas of focus
The strategy is guided by six focus areas: driving research, innovation and research; acceleration of project development; building sustainable infrastructure; promoting reconciliation with indigenous peoples; developing a diverse workforce and prosperous communities; and strengthening global leadership and security.
In an effort to encourage innovation and research, C$79.2 million will be committed to public geoscience and research to help identify and evaluate mineral deposits. As part of this focus, a new 30% Critical Mineral Research Tax Credit will be introduced for targeted critical minerals, and C$47.7 million will be set aside for upstream critical mineral research and development through research laboratories. Another C$144.4 million is earmarked for further research and development and the use of technologies to support critical mineral development for the upstream and midstream segments of the value chain.
To accelerate project development, the strategy identifies the need to streamline project assessments and permits, as well as strategic investments to unlock potential in mineral-rich regions.
To that end, three major funding initiatives identified in the 2021 and 2022 federal budgets will be undertaken: a C$1.5 billion critical minerals envelope under the Strategic Innovation Fund (SIF) to support advanced manufacturing, processing and recycling ; C$40 million to support northern regulatory processes in project review and permitting; and C$21.5 million for the Critical Minerals Center of Excellence to develop policies to help project developers navigate regulatory processes.
The SIF will be one of the “most significant” direct financing channels, the strategy says, with the fund helping to build key mineral value chains where prefabrication and production activities take place in the country, while supporting projects that reduce reliance on critical mineral inputs from abroad. FSI funding will begin in 2024-2025 and last for six years.
The focus on building sustainable infrastructure aims to address the challenges of developing critical mineral projects in remote or underdeveloped areas. The strategy says the cost of building infrastructure in those areas discourages investment and “hinders the socio-economic development” of communities open to mineral development. And in northern regions, underdeveloped infrastructure poses challenges for industrial development and access to Canadian and international markets. A total of C$1.5 billion will be allocated over seven years, starting in 2023-2024. for such infrastructure development, especially for priority deposits.
In addition, the strategy says that since off-grid mining operations in remote areas are highly dependent on GHG-emitting energy sources, strategic investments in green energy infrastructure would improve the environmental performance and sustainability of critical mineral projects by integrating them into the value chain. Such investments could boost competitiveness and reduce energy costs.
The document does not specify how infrastructure funds will be disbursed or accessed.
In an effort to advance reconciliation with indigenous peoples, the strategy recognizes in the fourth focus that indigenous peoples are the rights holders of the lands on which mineral resources are located. Indigenous engagement in critical mineral development will seek to encourage Indigenous participation in projects while respecting Aboriginal and treaty rights, promote economic reconciliation and support safe communities throughout the life cycle of a critical mineral project.
For this focus, at least C$25 million will be allocated for Indigenous participation and early engagement in the strategy, out of C$103.4 million over five years, starting in 2022-2023, through the Indigenous Natural Resources Partnership Program. This program is available to communities, businesses and organizations.
Actions within the strategy will be consistent with the Canadian government’s implementation of the Indigenous Peoples Rights Act, the document states.
The fifth focus on increasing a diverse workforce and prosperous communities recognizes that up to 113,000 new workers will be needed in the mining sector by 2030 to meet demand and replace workers leaving the sector. And as the critical minerals industry continues to develop, demand will grow for the diverse skill set needed in geoscience, artificial intelligence, computer technology and automotive assembly.
Several federal training initiatives will help build those skills, including through the Workforce Solutions Sector Program, the Indigenous Skills and Employment Training Program, the Skills and Partnerships Fund and the Youth Employment and Skills Strategy.
Diversity and inclusion will be prioritized in those efforts, and the federal government supports the training and retention of women, youth, indigenous peoples and other groups seeking equality.
The sixth and final focus seeks to ensure international engagement on critical minerals in line with the federal government’s strategic objectives and its Indo-Pacific strategy.
It will also further integrate the government’s Responsible Business Strategy, which was launched in April 2022 with multilateral agreements; and use initiatives such as Tovards Sustainable Mining to encourage environmentally sound mining practices and international cooperation to prevent conflict products, child labor and “environmentally poor” operations from entering supply chains.
Budget 2022 allocates C$70 million over eight years, starting in 2022-2023, for international partnerships to promote Canadian mining leadership, including promoting ESG standards and supporting multilateral commitments on critical minerals.
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