Fortune Minerals : Cobalt News

lexpert.ca - October 24, 2023

Funding issues and regulatory timelines holding back critical-minerals strategy

Canada has a short window to become the international leader in critical-mineral development that the federal government wants it to be, say mining lawyers…Last December, Ottawa announced Canada's critical-minerals strategy to spur economic growth and address climate change. Among the feds' focus areas in achieving their goals are "accelerating project development" and "driving research, innovation, and exploration."…Stakeholders generally agree that producing critical minerals for batteries powering cars, solar panels, windmills, and electronics is necessary for the world to transition away from fossil fuels, says Linda Hogg, a partner in Gowling WLG (Canada) LLP's Vancouver office. She says Canada is at a "junction point where we can really make a difference."…"This is one of the few areas where both federal and provincial governments tend to be rowing in the same direction," adds Ian Mitchell, head of mining and partner in the capital markets practice at Gowlings…Insufficient access to capital is a primary hindrance to the development of a new critical- minerals ecosystem, both Hogg and Mitchell say…"The risk capital hasn't been going into the mining space to advance projects," says Mitchell…Part of the reason for that is the "significant competition" for investment in the last decade, including from the technology and cannabis industries, says Abbas Ali Khan, a partner at Bennett Jones LLP, whose practice is focused on the mining and technology industries…"Even in the bull markets, there's always a shortage of capital."…Khan says Canada is competing for mining funding with Nevada and Australia, which are more friendly jurisdictions from a regulatory standpoint…In the competition for investment dollars, lawyers agree that time is not on Canada's side…Khan says it takes around 15 years - and can take as much as 25 - to bring a mine into production…Khan says the federal critical-minerals strategy has done a good job of attracting manufacturers of battery metals. Whether it's the General Motors facility in Bécancour, QC; the Volkswagen plant in St. Thomas, ON, or the Stellantis/LG Energy factory in Windsor, ON, federal and provincial governments are shelling out billions in subsidies to encourage auto manufacturers to produce their electronic-vehicle batteries in Canada…To supply these and other factories with the required minerals, Khan says Canada needs to streamline the approval process to get more mines into operation. He says it must also enhance the supply chain with more refineries, smelters, and the necessary infrastructure to keep it humming…"For the last 10 years, mining and development projects in Canada have not been moving forward very quickly," says Mitchell…With a clean grid, access to minerals, proximity to the EU and the US markets, the global transition from fossil fuels, and the opportunity to partner with First Nations on projects, Canada can be a world leader in critical mineral production, say Hogg and Mitchell.