For Canada to Be a Mining Leader, Industry Collaboration With Government is Needed

The energy transition and the significant need for natural resources to support it could set the stage for a prosperous mining sector for years to come. Meeting this once-in-a-generation demand will require coordinated efforts between mining companies and governments.

Fortunately, the role of critical minerals as a fundamental resource necessary to drive the global economy on a net-zero pathway is well understood by the investment community. What is needed now is to develop a framework that can efficiently incentivize and drive much-needed capital to the only sector with the expertise and capability to extract and produce the valuable resources, said Ilan Bahar, Managing Director and Co-Head, Global Metals & Mining at BMO Capital Markets, on the heels of the 33rd BMO Global Metals, Mining & Critical Minerals Conference (GMMCM).

“The awareness around critical minerals is fantastic,” he said. “What we need as a sector is to generate broader belief that a return can be generated there.”

Bahar was one of several prominent members of the mining community who took part in the Revitalizing the Canadian Mining Ecosystem panel hosted by The Canadian Club. The event, which coincided with the Prospectors and Developers Association of Canada (PDAC) Convention in Toronto, included Sean Boyd, Chair of the Board of Agnico Eagle Mines, Aline Côté, the Industrial Co-Lead for Zinc and Lead at Glencore, and Daniella Dimitrov, a consultant in the mining and battery materials refinery space.

Everyone on the panel agreed that the only way to have a successful critical minerals strategy is to create a robust business environment, including infrastructure support and channels to develop the best and most effective talent in the sector. 

“At the end of the day, the energy transition will happen,” said Daniella Dimitrov. “To have a critical mineral strategy that is successful, you really need to have a mining industry that is successful.” 

Identifying causes of project complexity

Part of bolstering the investment case for the industry involves identifying and addressing the key challenges to achieving economic efficiency. “Mines are made, they’re not found,” explained Agnico Eagle’s Sean Boyd. “It’s getting more challenging, not just in terms of the quality of deposit from a grade perspective, but the location of these deposits.” The industry needs to work closely with the government and potential investors to create conditions to make average deposits more economical, he said. 

This includes condensing the time it typically takes to go from discovery to an operational mine by improving permitting processes, building a strong workforce, and, in some cases, encouraging governments to contribute strategic capital to make projects financially feasible. “We have to work smarter, we have to work together, and we have to build those partnerships to build that next generation of mine.”

Attracting capital

Accelerating that timeframe and creating more milestones to show progress are some other ways to improve the economic conditions for miners to attract longer-term investors, such as Canadian pension funds, to invest more in commodities. Foreign capital, particularly from the Middle East, will also be an important driver.

“There’s a realization from the government’s part that not only are we not investing enough in Canada, but when we do, and if we do, how do we compete with the rest of the world?” said Glencore’s Aline Côté.

While countries like Canada, Australia and Chile are trying to meet demand and reward patient capital in a very responsible way, they are competing against Asia, where operational standards are completely different.

Cote would like to see that investment rewarded with a premium, which would require much closer collaboration between the mining industry and government to resolve this issue.

The future of mining

For Boyd, success comes down to greater coordination between government, investors, and miners in several key areas, including infrastructure, Indigenous partnerships and skills training. “It’s really time for action,” he said. “Canadians need to understand the contribution mining brings to communities, and that’s what the government is beginning to realize.”

Dimitrov said it was a positive signal that other countries are already paying more attention to the resource sector. Referring to her experience at BMO’s GMMCM Conference, where Jigar Shah, Director of the Loan Programs Office in the U.S. Department of Energy, was a keynote speaker, she talked about the growing government presence at key mining events. She explained that they are working to cut paperwork and facilitate permitting to keep projects on track.

Boyd noticed a similar trend, with senior representatives from the Department of National Defence in Canada exploring ways to build the infrastructure in the North for airstrips and energy. This is not only a story about resource development, but it’s also about sovereignty, Indigenous economic reconciliation, and green energy, he said.

“It’s a matter of pulling it all together now,” added Boyd. “There’s a message here... mining is going to help us generate a tremendous amount of wealth, so let’s start working on it.”