Critical Minerals Alliances 2022 - September 12, 2022
Understanding that the renewable energy and electric vehicle revolution offers a "generational opportunity for Canada and its world-class mining sector," Ottawa is leveraging the nation's wealth of critical minerals to become a powerhouse that feeds raw materials into resource-hungry clean energy and technology supply chains.
"Canada's Critical Minerals Strategy will position Canada as the global supplier of choice for the critical minerals and materials needed for the green, digital global economy," Canada Minister of Natural Resources Jonathan Wilkinson said during a June address at the Prospectors & Developers Association of Canada (PDAC) convention in Toronto.
Ottawa began positioning Canada as a major player at the front end of the emerging green energy supply chains with a list of critical minerals that reads like a catalog of mined commodities needed for the high-tech and low-carbon future – and found in abundance across the Great White North.
While Canada's list of 31 critical minerals contains many of the usual suspects, such as cobalt, graphite, lithium, and rare earths, it also includes the copper, nickel, and zinc that are fundamental to building the envisioned clean energy future.
"As we transition to cleaner, mineral intensive forms of energy, democratic countries are going to need access to stable and secure sources of critical minerals," said Wilkinson. "Clearly, rapid development of these sources is urgently required."
To help meet this urgent need, Canadian provinces and territories are also positioning themselves along renewable energy supply chains – from the establishment of the country's first rare earths mine in Northwest Territories to manufacturing EVs in Ontario made with domestically mined and processed minerals and metals.
To help deliver critical minerals warehoused in Canadian mines and deposits, Ottawa budgeted C$3.8 billion (US$3 billion) to support Canada's mining sector and bolster the supply chain resiliency, especially when it comes to the supply lines leading to lithium batteries and EVs.
This budget includes:
• $1.5 billion for investments in new critical minerals projects – prioritizing processing, manufacturing, and recycling for key mineral and metal products along the battery and rare earths supply chains.
• $1.5 billion for infrastructure investments to unlock new mineral projects in critical regions, such as Northern Ontario's Ring of Fire.
• $144 million for research and development to support the responsible extraction and processing of critical minerals.
• $80 million for public geoscience and exploration programs to help find the next generation of critical minerals deposits.
• A doubling of the Mineral Exploration Tax Credit for targeted critical minerals such as nickel, copper, cobalt, rare earths, and uranium.
• Renews the Centre of Excellence on Critical Minerals for three more years with an allocation of $10 million.
• Adds $40 million to support northern regulatory processes in reviewing and permitting critical minerals projects.
• $70 million for global partnerships to promote Canadian mining leadership.
"Doubtless, these measures will give Canada a lock on the top spot for global exploration investment and spur new investments across the value chain," Mining Association of Canada President and CEO Pierre Gratton said.
He added that the "budget should also send a strong signal to our allies in the US and Europe that Canada is and will remain a trusted source for responsibly mined and processed materials essential for the world's low carbon future and security."
With vast critical minerals resources, a world-class mining sector, and C$3.8 billion allotted to seizing the once-in-a-century opportunity offered by the transition to low-carbon energy and transportation, Ottawa turned to its provinces, territories, Indigenous Peoples, mining sector, and other interested stakeholders to help develop Canada's Critical Minerals Strategy.
Leveraging the national and global stage provided by the PDAC mining convention, Wilkinson released a paper aimed at getting the Canadian critical minerals strategy conversation started.
"Every stage of the critical minerals value chain presents an opportunity for Canada: exploration, mining, processing, manufacturing and advanced manufacturing, and recycling. Moreover, these opportunities exist in every region of the country," the natural resources minister penned in the introduction of the Canadian critical minerals strategy discussion paper. "That's why our government has committed to develop a Critical Minerals Strategy, backed by nearly $4 billion in Budget 2022 – a strategy that will address the entire value chain."
The federal government sought input on five key facets of the nation's preliminary critical minerals strategy:
• Economic growth and competitiveness.
• Environmental protection and climate action.
• Enhanced security and partnership with allies.
• Advancing reconciliation.
• Advancing diversity and inclusion.
Based on the input received by Sept. 15, Ottawa is expected to publish Canada's Critical Minerals Strategy by the end of the year.
"I look forward to working with Indigenous Peoples, provinces, territories, industry and stakeholders to finalize a strategy that will create good jobs for Canadians, grow our economy and further Canada's standing on the world stage," Wilkinson wrote.
As Ottawa hammers out Canada's official strategy, critical minerals supply chains are beginning to take shape across the Great White North. This includes the emergence of the first rare earths supply chain in Canada.
This supply chain begins at Nechalacho, a relatively small but very high-grade rare earths mine in NWT that began production in 2021 – making it the first and thus far only REE mine in Canada.
The very high-grade rare earth ore that comes to the surface at Nechalacho has allowed Vital Metals Ltd. to quickly establish a mine there with a very small environmental footprint.
Vital contracted Nahanni Construction, a Northwest Territories-based dirt moving company majority-owned by the Yellowknives Dene First Nation, to mine high-grade rare earths ore at Nechalacho.
"We are developing Nechalacho using the most sustainable methods possible, which includes the use of local labor so that we can support the communities surrounding our project," said Vital Metals Managing Director Geoff Atkins.
A TOMRA X-ray transmission (XRT) sorter is being used to upgrade the already high-grade ore at Nechalacho to a concentrate that runs above 30% rare earth oxides.
Without the need for a complex processing facility or tailings storage, the Nechalacho Mine is something akin to a gravel quarry – simply mine and crush near-surface rock and sort out the best material with little or no water and zero chemicals.
"Mining is changing. While sorter technology is widely used in diamond mining, this is the first time that sensor-based sorting has been used as a single step to produce a metal ore concentrate. It is much more environmentally friendly," said TOMRA engineer Russell Tjossem, who trained members of the Yellowknives First Nation to operate the sorter.
In the world of rare earths, however, mining is but the first in a three-step process required to separate this suite of 15 technology elements into the individual metals that can be used by industry.
This second link in Canada's rare earths supply chain is Vital's rare earth carbonate production plant in Saskatoon, Saskatchewan, where they are now being upgraded to a mixed rare earth carbonate.
"We have been a rare earth miner for more than 12 months and now we can commence production of rare earth carbonate," Vital Metals Managing Director Geoff Atkins said in June.
During the commissioning phase, which is slated to be completed in October, Vital expects to produce a 2.5-metric-ton mixed rare earth carbonate sample that is ready for the third link in the rare earths supply chain – separation.
The mixed rare earth product produced in Saskatchewan is being shipped to REEtec, a Norway-based company that has developed an efficient and environmentally sound REE separation technology, for this final stage of processing.
Under an offtake agreement with REEtec, Vital will deliver roughly 500 metric tons of total rare earth oxides to the Northway separation plant by October 2023. This carbonate is expected to contain 187.5 metric tons of neodymium-praseodymium, a pair of rare earths that are a primary ingredient in the powerful neodymium-iron-boron magnets used in EV motors, wind turbine generators, and countless other products.
While Nechalacho rare earths are being sent to Norway, and potentially to Alaska starting in 2024 for separation, Canada will soon have this capability in-house.
Saskatchewan Research Council, which is developing a rare earth processing plant next to Vital's Saskatoon facility, received $20 million in provincial funding in June to complete the development of facilities able to separate rare earths and produce the metals used in the powerful permanent magnets that go into EV motors, wind turbine generators, and other applications.
"SRC is proud to be a world leader in rare earth element processing and separation technologies which will play an important part in the innovative solutions needed to reach net-zero," said Saskatchewan Research Council President and CEO Mike Crabtree. "This additional funding will support SRC's ability to continue advancing the production of rare earth elements, as well as our capacity to move further down the value chain as we build a rare earth hub in Saskatchewan."
A hub that will add the final link to a complete rare earths supply chain in Canada.
While rare earths are vital to efficiently generating and utilizing low-carbon energy, the quantities of this group of elements needed pales in comparison to the mined raw materials needed for lithium-ion batteries. And Ontario is fostering a complete battery supply chain that extends all the way from the mines to the EVs these batteries will go into.
In March, Ontario unveiled a mines-to-market strategy that leverages rich stores of critical minerals in the northern reaches of the province to the robust manufacturing sector in the south.
"The Critical Minerals Strategy is our government's blueprint to connect industries, resources and workers in our province's north to the future of manufacturing in the south as we build up home-grown supply chains," said Ontario Premier Doug Ford. "Doing so has never been more important as we secure game-changing investments in our auto sector to build the electric vehicles and batteries of the future using Ontario minerals."
Ontario has deposits of all the major minerals and metals needed to manufacture the lithium-ion batteries that go into these EVs, plus mines and deposits with two dozen other minerals critical to renewable energy, high-tech, and other industrial sectors.
"These are the materials the world wants and needs for a broad array of uses, including smartphones, batteries for electric vehicles, pharmaceuticals, solar cells and advanced manufacturing technologies to name just a few," said Ontario Minister of Natural Resources and Forestry Greg Rickford.
To leverage its rich mineral endowment, Ontario is encouraging mining and processing that will further anchor the downstream EV supply chain.
"Ontario must build its capacity in chemical processing and battery component manufacturing to establish an integrated battery supply chain," the province inked in a report outlining its critical minerals strategy.
Ford, General Motors, Honda, Stellantis, and Toyota already have automotive and parts factories in southern Ontario. With all these automakers transitioning to electrified models over the next 10 to 15 years, the province has a lot of built-in demand for lithium-ion batteries and the minerals and metals they are made from.
Last year, GM announced that it is investing roughly C$1 billion (US$780 million) to convert an existing auto assembly plant in Ontario into Canada's first large-scale EV manufacturing facility.
To help supply the battery raw materials that will be needed for this and other EV plants, the province has invested in Frontier Lithium's innovative lithium extraction process for lithium and C$5 million to support the production of battery-grade cobalt sulfate at Electra Battery Materials Corp.'s cobalt refinery.
The province is also investing C$250,000 to support the development of a battery-grade nickel sulfate battery precursor cathode active materials plant at a future battery materials park being developed around Electra's cobalt refinery.
"Ontario is home to North America's only battery grade cobalt refinery, an abundance of nickel and clean hydroelectric power," Electra Battery Materials CEO Trent Mell said earlier this year. "Together we can leverage Electra's existing footprint and the Government of Ontario's ambitions to build a world class battery supply chain in the province."
Much like its neighbor to the west, Quebec has emerged as a major link in North America's lithium-ion battery supply chain.
This is especially true for the area around Becancour, a small Quebec town along the shores of the St. Lawrence River about midway between Montreal and Quebec City, which has attracted some of the biggest names in North America's burgeoning lithium battery and EV sectors.
General Motors, POSCO Chemical, and BASF have announced plans to develop lithium battery cathode active materials and recycling plants in this strategic Quebec locale. These global corporations join Nouveau Monde Graphite Inc., a Canadian mining company building a facility at Becancour that produces the coated spherical purified graphite that goes into the anode side of lithium-ion batteries.
The Becancour industrial park where these and other battery materials companies are setting up shop has quickly earned the name Battery Valley.
BASF says Becancour offers the ideal combination of highly efficient logistics for delivering battery materials to both North America and Europe and has ready access to hydroelectricity that will lower the carbon footprint of products produced there, an advantage that can be passed on to the battery and EV sectors.
Battery Valley also happens to be in an area of eastern Canada that is rich in the minerals and metals needed for battery material manufacturing, which is why Nouveau Monde blazed the trail to Becancour, which lies about 100 miles (165 kilometers) from the company's Matawinie graphite mine.
Nouveau Monde's Becancour plant is being built to produce 42,000 metric tons of spherical coated anode graphite per year and is designed for expansion to keep pace with battery demand.
Becancour's status as Battery Valley was further cemented when GM announced that it is working with POSCO Chemical to develop a roughly $400 million cathode active materials plant there.
"With this new processing facility in Bécancour, GM will help lead the EV battery supply chain while also launching Canada's first full EV manufacturing plant in Ingersoll, Ontario, later this year," said GM Canada President and Managing Director Scott Bell.
GM and POSCO's decision to build this cathode materials plant in Becancour is in line with Quebec's ambitions.
"First, we want to exploit and transform Quebec's minerals to manufacture battery components. Second, we want to produce the cells that will power the assembly plants. Third, we want to develop battery recycling using Quebec technologies. Finally, we want to increase the production of commercial electric vehicles," said Quebec Minister of Economy and Innovation Pierre Fitzgibbon.
Furthering Quebec's four-part strategy, BASF signed an agreement to secure a large land package in Becancour to develop its own cathode active materials production facility, as well as future plants that will recycle battery materials and refine the metals needed for cathodes.
"This land acquisition is a necessary prerequisite to further advance our strategy to grow our footprint in key regions to better serve our customer's operations with sustainable and reliable local supply," said Peter Schuhmacher, president of the catalysts division at BASF. "We look forward to supporting the e-mobility transition in the United States, Canada, Mexico and beyond."
Canada's Industry Minister Francois-Philippe Champagne hinted that there could be more EV-related companies moving into Quebec's Battery Valley.
"We're building around Becancour kind of the full ecosystem of the critical minerals you need to produce a battery ... that's why you'll see more to come," he said.
Electra Battery Materials is in talks with Quebec government officials about setting up a cobalt refinery similar to its Ontario facility in Battery Valley. The Quebec economy minister says he also met with Tesla executives late last year to discuss where the province fits into the iconic EV manufacturer's EV ambitions.
Considering how active Tesla has been along the entire EV and battery materials supply chain, a hub in Becancour and its proximity to battery raw materials, low-carbon electricity, and infrastructure would not be a surprise.