Where we are and where are we going?
Canada’s history includes over a century of evolution within our mineral exploration, development, and mining industry.
We have honed on-the-ground reconnaissance and remote-sensing skills used to identify prospective areas and new deposit discoveries, and Canadian companies are at the forefront in research and development of new extraction, processing, and reclamation techniques. With this, Canada has built up a continuum of skills and businesses making us a global industry leader.
This evolution started here at home – in a country fortunate to have such a wide range of geological environments that host the mineral and metal deposits we rely upon as a modern society. From early-stage exploration to environmental reclamation, the mineral industry generates economic activity across the country, and Canadians should take pride in how the sector continues to evolve responsible and sustainable best practices.
Looking back, Canada has ranked as high as second in the world for nickel production, and today we remain a top 10 producer of nickel, gold, iron ore, and zinc, with Canadian companies representing some of the lowest carbon-intensity producers of minerals and metals across the globe. These achievements come in part from extensive reliance on hydroelectric and nuclear energy in mineral extraction and processing.
Looking ahead, Canada will have to continue to expand our energy generation capacity and our electrical grids will need to integrate new technology to support a growing population and industrial base into the future. This is true even before we consider decarbonizing our energy and transportation infrastructure, implementing a critical minerals strategy, or aiming to become a responsible supplier of critical minerals for other nations. This challenge will require a multitude of industries to establish (in most cases) completely new supply chains that rely on sourcing new mineral deposits, as much as recycling and improved efficiencies.
Some estimates suggest that meeting ambitious global decarbonization targets will demand more copper by 2035 than has ever been mined to date, and that we will need to see six new large mines brought into production each year through 2050, and beyond. How are we doing against these measures? How much copper do we really have in the ground and how much do we extract each year? Are we discovering more than we mine? And do we have enough to build out future Canadian industries?
We will attempt to answer some of these questions.
To understand Canada’s copper potential, the difference between a mineral resource and mineral reserve must be noted. The Canadian Institute of Mining (CIM) defines a mineral resource as “a concentration or occurrence of solid material of economic interest in or on the earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.” Only after more detailed scoping work that includes economic, geotechnical, engineering, and other factors is complete can a mineral resource be ‘upgraded’ to a mineral reserve – the next step to becoming a source of new production.
There is a contrast in trends as copper resources climbed roughly 35 per cent over the last eight years, while reserves have fallen over 20 per cent in the same time period. This means that we have found more copper, yet the amount that could reach production in the next decade has fallen substantially.
Like reserves, copper production in Canada is down over 20 per cent since 2014, despite the fact the metal’s price has risen nearly 100 per cent over its low point in 2015. We show copper here as an example, but the trends are similar when looking at nickel or zinc, while production of lithium in Canada remains limited to a single mine in 2024. Although the largest industrial mobilization in history may be imminent, we are very quickly losing our capacity to produce the raw inputs needed to drive this transition.
Fortunately, we have seen Canada’s copper resources climbing in recent years, coinciding with a notable rise in metal pricing, a growing global awareness of critical minerals, and the launch of Canada’s Critical Mineral Exploration Tax Credit (CMETC). These drivers have sparked domestic exploration spending, and are an affirmation that incentives can have a real impact on the ground.
How do we see more resources upgraded to reserves and then build more mines to reverse the trend of falling production in Canada?
A few of the efforts PDAC has been asking our federal government to take on include:
- Expand eligibility so companies can use flow-through funds towards scoping and assessment work, and see more mineral resources converted into reserves.
- Boost the level of public geoscience funding, increase accessibility of geoscience modelling and research, and integrate across government decision-making.
- Ensure tax credits and incentives like the Clean Technology Manufacturing Investment Tax Credit are applicable to Canadian polymetallic mineral deposits and essential mining activities.
- Commit to major infrastructure builds in rail, roads, hydroelectric, and alternative energy sources to bring minerals closer to markets.
- Help ‘close the loop’ on minerals mined, processed, and refined in Canada by supporting new domestic processing, recycling capabilities, and capacities.
We have seen our capacity to produce minerals like copper, nickel, and zinc slowly decline in Canada, and we are not finding new mineable deposits – or building mines fast enough – to offset this. We need support from all Canadians across the country to reverse these trends – we must build more mines to reduce our reliance on foreign mineral inputs, increase our transmission capacity, and deliver responsibly-sourced minerals from Canada to global markets. Without this broad support, the mineral industry will continue to flounder, despite the development of targeted strategies and incentives.
PDAC will continue to champion this message, and we call on governments across the country to ensure it resonates with Canadians, so we can work towards a common goal.
©2024 Prospectors & Developers Association of Canada. All Rights Reserved.
This article was originally published by the Prospectors and Developers Association of Canada (PDAC) in the summer 2024 issue of CORE Magazine.
