Access to critical minerals has moved from a niche concern to a defining issue for national security, industrial policy, and climate innovation.
But Canada risks missing out on billions in critical mineral investment without swift policy changes, according to a newly released report.
Recently published research from the Canadian Climate Institute finds governments should act quickly to de-risk critical minerals investment and accelerate project timelines in order to “avoid missing out on a multi-billion dollar economic opportunity.”
“Critical minerals represent a multi-billion dollar opportunity for Canada in a global energy transition that continues to pick up pace,” says Rick Smith, president of the Institute.
The report from the Canadian Climate Institute identifies six “priority” minerals: copper, nickel, lithium, graphite, cobalt, and rare earth elements. These minerals “form the building blocks of clean technologies” such as electric vehicles.
Yet Canada’s current production levels have barely scratched the surface of existing reserves, according to the report, and demand is growing.
“Canada’s critical minerals sector is struggling to attract enough investment to keep up with demand,” Smith says. “As competition heats up and trade relationships evolve, Canadian governments should make haste to adopt policies to unlock private investment and bring resources to market faster.”
The report, titled “Critical Path: Securing Canada’s place in the global critical minerals race,” finds that Canadian investment in critical minerals must grow “substantially” to keep pace with domestic and global demand. By 2040, Canada risks losing out on $12 billion a year in critical minerals production unless mining ramps up.
The report estimates investment flow of up to $30 billion over the next 15 years into Canada’s critical mining space is required to meet growing global demand.
To give investors more certainty, the report suggests that governments should act to share risks through targeted policies and programs, such as equity investments and offtake agreements.
“Securing Canada’s place in the global critical minerals race requires swift action to unlock public and private investment that can power Canada’s energy transition with the building blocks of clean technologies,” posits Marisa Beck, Director of Clean Growth for the Canadian Climate Institute. “Our Critical Path report offers a clear blueprint for the steps governments can take to seize this opportunity.”
The Canadian Climate Institute is Canada’s premier climate change policy research organization, producing analysis, modelling, and research focused on incentivizing low-carbon competitiveness.