Canadian Critical Minerals Sector

Canadian Critical Minerals Sector Growing Rapidly in 2024

Global decarbonization efforts and the goal of achieving net-zero carbon by 2050 is the largest economic transformation in modern history. To achieve a carbon-pollution-free global economy by 2050, hydrocarbons must be replaced with renewable power sources, which leads to a rapidly growing demand for the critical minerals required to engineer renewable energy infrastructure.

In this article, we look at some of the top trends in the global and Canadian critical minerals market and how Canadian businesses are impacted by these ongoing trends.

What are Critical Minerals?

Critical Minerals are metallic or non-metallic elements that are the building blocks for the future of our green and digital economy.

Critical minerals such as Zinc, Uranium, Titanium, Copper, Scandium, Nickel, and Cobalt are essential to producing and developing low-carbon energy infrastructure components. These can include wind turbines, transmission grids, batteries, energy storage systems, electric vehicles, solar panels, and power cables, all of which facilitate widespread global electrification.

Energy is critical to the Canadian economy as it is a major source of capital investments, trade flows, and is a key generator of jobs. The Canadian mineral market produces more than 60 minerals and was valued at $55.5B in 2021, 20% higher than 2020. As Canada transitions towards a low-carbon future, domestic demand for mineral and metal products is likely to continue to increase.

The following key trends are contributing to the steadily rising demand for Canadian critical minerals sector, which is being forecasted for high-growth in the next few years.

Increased Mineral Demand in Electric Vehicle Manufacturing

Production of critical minerals, specifically copper and zinc, serves a wide range of industry needs, particularly EV manufacturing sectors, which require a stable and reliable supply of critical minerals. According to the regulations proposed by the Government of Canada, EVs will account for 20% of new vehicles sold in 2026, 60% in 2030, and 100% by 2035. Ontario is a global hub for EV production, attracting over $27B in automotive and EV-related investments from 2020-2023, leading to anincrease in demand for Canadian critical minerals in this sector such as lithium, nickel, copper, cobalt, and graphite amongst others used to make EV batteries and other parts.

Environmental, Social, & Corporate Governance (ESG)

The latest research highlights an increased favourability towards businesses that operate in an environmentally friendly way. Investors are increasingly concerned about local community impacts, waste management, water stewardship, and attaining net-zero emissions, and these concerns drive many of their decision-making processes.  A growing body of evidence indicates sustainability is a key driver for building business continuity.

Holding sustainability at the core of your operations is a key part of risk management. By getting ahead of the curve on sustainability and supplying sustainably sourced critical minerals to the domestic market, companies signal the strength of their business amid growing climate change concerns. Businesses that seamlessly integrate sustainability into their business practices are positioned to capture the competitive value sustainability offers.

New Innovations Within the Canadian Critical Minerals Sector

With increasing pressure to reduce emissions, manufacturers and processors will seek low-emission upstream suppliers to reduce the carbon impact on their entire supply chain. By incorporating innovative technologies that provide safer and more efficient extraction capabilities, companies can reduce costs and minimize environmental impacts while creating social benefits such as better working conditions and increased sustainability.  

Canadian Critical Mineral businesses have multiple government funding programs available to help them adopt clean technologies into their operations to produce key critical minerals with minimal environmental impact.

Research has also identified global critical mineral market trends that can help Canadian businesses strategize their approach and become proactive competitors iworldwide.

Rising Demand Global Demand for Critical Minerals

Renewable energy is expected to be the fastest-growing energy source, with consumption increasing at an average rate of 2.3% per year till 2040. In 2022, the International Energy Agency (IEA) reported that the global market size for energy transition critical minerals reached USD $320B and is expected to grow exponentially to adequately cater to the global net-zero 2050 goal.

As global customers increasingly seek renewable energy sources, Canadian critical minerals companies have a significant opportunity to play a larger role in the global marketplace to gain long-term revenue growth, potential financing, and market expansion for their products.

Concerns of Supply Chain Disruptions

A prominent trend in the critical mineral market has been the concentration of critical minerals in geopolitically risky locations, which hampers the global availability of critical minerals. In 2020, China alone controlled approximately 80% of the world’s critical mineral refining and 77% of the world’s battery cell manufacturing capacity, which highlights increasing risks of global supply chain disruptions and high potential for reinforcing existing supply vulnerabilities. Businesses operating in critical mineral-heavy industries must increase their purchasing from domestic and regional sources of critical minerals to ensure long-term business agility and resilience, which presents an opportunity for businesses within the Canadian Critical Mineral sector.

Canadian Critical Mineral Opportunities

Recent geopolitical events including the Russia-Ukraine war have underscored the fragility of global mineral supply chains, thus motivating governments and companies around the world to reassess their operations and build long-term supply chain resilience. Given the lack of competition in the North American region for sustainable critical mineral production, the Canadian government is investing in sustainable domestic suppliers to support Canadian critical mineral businesses and keep inputs for vital manufacturing capabilities close to home.

Government Grants for the Canadian Minerals Sector

If your company is in the critical minerals industry, Mentor Works, a Ryan Company is here to support you through the wide range of Canadian critical mineral funding opportunities available such as the Critical Minerals Innovation Fund (CMIF) or the Canada & UK: Critical Minerals Sustainability and Circularity Program that present a unique opportunity for Canadian businesses to strengthen their operations, exhibit their leadership as strategic partners in the global critical minerals market, and successfully secure a sustainable economic future. You can also subscribe to our newsletter for regular funding updates related to Canadian critical minerals and business strategy guidelines.

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