Mining industry set to benefit from clean tech

Canada has the vision and resources to take leading role, says Patricia Mohr.

In future years, after we’ve finally got past the pandemic, Canada’s resource industries will play an important role in achieving a strong economic recovery for Canada, according to the Task Force for Real Jobs, Real Recovery, convened by Resource Works of Vancouver. Exciting opportunities are opening up for Canada’s base metals and “critical minerals,” after a period of lacklustre financial performance.

The medium-term outlook for copper — an important commodity in B.C. — looks particularly bright. Despite largely balanced world supply and demand conditions in 2018-19, prices were pulled down last year by the U.S.-China trade war, which weakened global industrial activity and investor sentiment, followed by this year’s global pandemic. However, LME copper prices have already bounced back from the COVID-19 low of US$2.29 per pound in April and stand at a profitable US$2.89 in mid-August.

Commodity traders are reacting positively to strengthening economic indicators in China, which accounts for 51 per cent of global consumption. China’s industrial activity climbed 4.8 per cent year over year in July, the fourth consecutive monthly gain, after plunging 13.5 per cent during the COVID-19-related shutdowns of early 2020. Curtailed mine operations — especially in Peru and Chile — and delayed mine expansion have also tightened supplies.

Equally important is a growing investor perception that the medium-term outlook for copper is positive, with strong demand growth expected in electric and battery-powered autonomous vehicles, renewable energy (solar and wind) and utility-scale electricity storage, needed for intermittent power supplies.

While North American consumers may be slow to adopt electric vehicles (outside of Tesla) and significant investment is needed in charging stations, a rising market share by mid-decade is likely. China also strongly supports electric vehicle adoption by consumers, reinstating incentives earlier this year. Electric vehicles use three to four times more copper under the hood than a gasoline-powered vehicle.

By the middle of the coming decade, global producers may not be able to meet rising demand growth in the “green industries,” given mine depletion and today’s underinvestment. Significantly higher copper prices are required to spur on new mine development — at least US$3.30-$3.50.

The recent deal between Canada and the U.S. to collaborate on developing secure supply chains for “critical minerals” also sends an important signal on the importance of these metals to economic growth and the achievement of climate change objectives. Critical minerals include uranium, rare earths and key battery materials — lithium, cobalt and nickel — needed to support aerospace, defence and clean technology.

One country, China, currently controls 80 per cent of the world’s supply of rare earths — a group of 17 elements — suggesting the need to diversify supplies. Rare earths are used in magnets in some electric motors. Deposits are found in the Northwest Territories, Ontario and in the waste streams of Alberta oilsands producers, opening up an opportunity for Canadian mining companies specializing in remediation. Canada’s expansion in critical minerals will require a stepped up focus on mineral processing and metallurgy. Supplying hightech companies requires meeting exacting quality specifications and, in some cases, designing materials for specific uses. This is especially so with battery materials such as lithium. It’s exciting to see a startup company in Burnaby having considerable success in developing innovative cathode materials for lithium-ion batteries.

Finally, Canada is a world leader, not only in best-practice mining engineering and geology, but also in environmentally sustainable mining practice. The Towards Sustainable Mining program, developed by the Mining Association of Canada, has been adopted by the mining associations of Finland, Norway, Argentina, Botswana, the Philippines, Spain and Brazil.

With an increased focus on R&D in mineral processing and manufacturing, Canada would be uniquely positioned to supply the U.S. and international markets for critical materials.