CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Last year, when Michael Goehring addressed the Greater Vancouver Board of Trade (GVBOT) for Mining Month in May, the president of the Mining Association of BC (MABC) said there were seven new British Columbia mine or expansion projects worth C$4 billion in the queue waiting for regulatory approval and a final investment decision.
Last week, Goehring happily reported that two of those new mines – the Premier gold and Blackwater gold mines – are now in early construction and expected to pour first gold in 2024.
That will bring the total number of operating mines in British Columbia to 19.
Other projects waiting on approvals include two metallurgical coal mine projects, the Cariboo Gold project and the Eskay Creek revitalization project. Combined, these projects represent C$4 billion in investment, 6,400 new operating and construction jobs, First Nations benefits agreements and a total economic impact of C$10 billion, Goehring said.
Going forward, B.C. might also see the development of two new nickel mines.
“Nickel – often associated with Ontario – is a significant untapped opportunity right here in B.C.” Goehring said.
Mining appears to be having a moment. Last year, the economic impact of B.C.’s mining sector grew by 40 per cent, Goehring said, from C$12.6 billion in 2021 to C$18 billion ($13.2bn) in 2022, thanks to high commodity prices. Western governments and private sector investors now seem to be fully alive to the importance of mining to the energy transition and to energy and economic security.
“No matter where I go, the interest, support and recognition of the importance of mining is off the charts throughout B.C., Canada and in the U.S.,” Goehring said. “Mining has recently taken centre stage as the world has realized that minerals and metals are essential to the energy transition, and our efforts to reach net-zero by 2050.”
A global pandemic that underscored the fragility of supply chains, followed by Russia’s war in Ukraine (Russia being a major supplier of aluminum, copper and nickel to Europe), has been a wake-up call for Western nations, and B.C. stands to benefit from investment in new mines.
“We’re now in the midst of seismic geopolitical change,” Goehring said. “Canada and our allies are no longer willing to depend on China and Russia as suppliers of critical minerals.”
In the last federal budget, the Canadian government earmarked C$80 billion for clean technology, electrification and critical minerals (C$3.8 billion for critical minerals alone).
Likewise, major corporations, including auto manufacturers, are now investing in mines to secure supplies of critical minerals. General Motors Co. (NYSE:GM), for example, is taking a $650 million equity stake in Lithium Americas (NYSE:LAC), the Vancouver company developing the Thacker Pass lithium mine in Nevada.
“This unprecedented level of government backing and private sector initiatives is a significant catalyst for Canada’s mining sector to be a leading supplier of critical minerals,” Geohring said.
B.C. is the largest producer of both copper and metallurgical coal in Canada, and the second largest producer of silver. It could one day be one of Canada’s largest nickel producers, too.
Giga Metals (TSX.V:GIGA) and Mitsubishi Corp. are jointly working to develop the Turnagain nickel project 65 kilometres east of Dease Lake, and FPX Nickel (TSX-V:FPX) is working to advance the Baptiste nickel project in the Decar nickel district west of Fort St. James.
Goehring said the Turnagain deposit is ranked one of the world’s top-five deposits for contained nickel. And the Baptiste project is unique in that it is an awaruite deposit (a nickel-iron alloy) that lends itself to a type of processing and refining that could be done on site.
“This would be the largest nickel-sulphate operation in the world, with the potential to refine some 43,000 tonnes of battery-grade nickel right here in B.C. each and every year. That’s enough battery-grade nickel sulphate to meet approximately 17 per cent of the projected North American EV battery market for nickel in 2023,” Goehring said.
“It’s also going to be a big job creator, producing approximately 1,500 direct and indirect jobs over 30 years, while the refinery will support another 600 direct and indirect jobs over that time.”
The biggest challenge for mining in B.C. remains a sclerotic permitting process that adds to the length of time it takes to get a new mine built – an average of 13 years. The MABC has recommended six steps for governments to speed things up, including convening joint project tables to streamline and advance critical mineral projects.
“We need urgent action from both the provincial and federal governments to address the perennial challenges with permitting and authorizations for major mining projects,” Goehring said. “That said, it is encouraging that both levels of government are aware of these challenges and recognize things need to change.”
(This article first appeared in Business in Vancouver)
