The Importance Of Critical Minerals Strategies In Our Clean Energy Future

Credit to Tom Fisk

This article marks the first of a series that discusses the recently released Critical Minerals Strategies from Canada and Australia. These strategies outline each country’s vision to support and sustainably grow their critical mineral sectors. Both countries have vast mineral reserves – combined, Canada and Australia hold 22% of the world’s cobalt reserves – positioning them to be leaders (and competitors) in shaping sustainable and resilient supply chains as the world transitions to clean energy technology.

In this series, we will examine and compare the key focus areas of each country’s respective critical minerals strategy. Each has established six strategic focus areas, which are outlined in the table below:

Key Strategic Focus Areas

There are clear parallels and commonalities between both strategies, with a strong theme of expanding capabilities across the entire critical minerals value chain. The strategies share several objectives, such as enhancing international partnerships, promoting climate action and global decarbonization efforts, supporting economic growth and job creation, and advancing engagement with Indigenous peoples. This first article provides an overview of critical minerals and their significance, and highlights the investments made by both nations. Further installments will discuss how each country is approaching partnerships, regulatory hurdles, and workforce shortages.

What Are Critical Minerals?

Canada defines critical minerals as the building blocks for our green and digital economy; they are essential for modern technologies and national security. Although there is no standard definition of a critical mineral, countries have developed their own method of assessing mineral criticality, resulting in a variety of critical mineral lists. Canada has established a list of 31 minerals that they deem to be critical, while Australia has listed 26. These lists share significant overlap, however, there are some notable entries that are unique to each country: Canada lists potash, uranium, and nickel (where Canada ranks 1st, 3rd, and 5th in global production, respectively); and Australia lists zirconium and silicon (where Australia ranks 1st and 15th in global production, respectively). The United States has released a list of 50 critical minerals, excluding fuel minerals, such as uranium. The significant difference in list size is somewhat misleading; Canada and Australia consider Rare Earth Elements (REEs) and Platinum-Group Metals (PGMs) as single list entries, whereas the US lists the specific minerals that belong to these two groups. All-in-all, when these minerals are ungrouped, Canada’s list grows to 51 and Australia’s grows to 46. We have summarized these lists of critical minerals by country – including the EU, the UK, Japan, and India – as an addendum to this article below. Altogether, these countries highlight 67 critical minerals. The differentiation across each country’s selection is of interest. Our comparison can be used as a tool to identify potential gaps in supply and demand, strategic partnerships, and competitiveness levels.

Canada has declared 6 critical minerals as their initial strategic priorities – these include lithium, graphite, nickel, cobalt, copper, and REEs. These six mineral categories are believed to “represent the greatest opportunity to fuel domestic manufacturing” in Canada. The selection of these priority critical minerals highlights Canada’s focus on supporting the battery and electric vehicle (EV) industries; lithium, graphite, nickel, cobalt, and copper make up over 62% of the mineral inputs for an average EV battery cell, and REEs are required for the permanent magnets used in electric motors. The justification for this focus? Economic growth and job creation:

“A battery supply chain in Canada is estimated to directly contribute between $5.7 billion to $24 billion in GDP by 2030 annually, supporting between 18,500 and 81,000 direct jobs, depending on how quickly and ambitiously Canadian governments act. These figures grow to between $15 billion and $59 billion in annual GDP contributions, and 79,000 and 333,000 jobs, when indirect and induced activities and jobs are included.”

These priority critical minerals are also necessary for advancing renewable power and electrical grid capacity; permanent magnets are needed in wind turbines to generate electricity, grid-scale batteries are a key component in the 5successful integration of intermittent renewable energy generation, and significant amounts of copper are required to expand transmission and distribution capabilities of our electrical grid.

On the other hand, Australia is not prioritizing specific critical minerals. Instead, they highlight a set of initial priority technologies, which includes: batteries and battery components; rare earth permanent magnets; catalysts for hydrogen production; semiconductors for micro-chips and solar PV; defense technologies; and high-performance alloys and metals. This set of priority technologies is broad and requires a variety of critical mineral inputs. This approach may complicate decision-making for upstream exploration activities but provide clarity for midstream and downstream activities.

The Five Pillars of the Critical Mineral Value Chain

The Canadian Critical Minerals Strategy provides a definition of the critical minerals value chain. It includes five segments: geoscience and exploration; mineral extraction; intermediate processing; advanced manufacturing; and recycling. The value chain is illustrated in Canada’s Strategy as follows:

The critical minerals value chain as described by Canada

Both Canada and Australia realize that geographically concentrated segments are highly vulnerable to risks and prone to disruption. By expanding their capabilities across the critical minerals value chain and building trusted international partnerships, Canada and Australia aim to lessen their exposure to such risks and disruptions.

Canada believes that its greatest opportunity for industrial integration lies in clean technologies, information and communication technologies, and advanced manufacturing inputs and materials. Strengthening these value chains through government funding and collaboration with allies will enhance Canada’s ability to attract investment and ensure resilient supply chains while driving economic growth and job creation. The prioritization of these high-potential industries and six critical minerals provides a clear picture of Canada’s focus across all segments of the critical minerals value chain.

As previously mentioned, Australia is initially prioritizing a set of technologies. This approach perhaps sheds more light on their vision for midstream and downstream activities but fails to narrow their upstream exploration initiatives.

Where Are They Investing?

Now that we’ve outlined where each country’s priorities lie, let’s evaluate where they are actually investing. Do their investments and funding recipients align with their stated priorities?

The most notable investments in Canada’s strategy are shows in the following infographic:

Some of the most noteworthy projects and collaborations generated by these strategic investments are listed below:

The $72.9M investment in public geoscience and exploration includes investments in geological modeling and resource potential mapping.

The 30% Critical Mineral Exploration Tax Credit works in combination with the existing flow-through share program and is applicable to nickel, lithium, cobalt, graphite, copper, REEs, and uranium, among others.

The $1.5B for infrastructure development investments complements existing clean energy and transportation programming, including the Canada Infrastructure Bank (CIB), which announced in June 2023 at least $100M of investments in enabling infrastructure. They are also complementary to programming such as Transport Canada’s National Trade Corridor Fund (NTCF) and NRCan’s Smart Renewables and Electrification Pathways (SREPs) Program.

The $144.4M for R&D and deployment of technologies and the $47.7M for Canada’s research labs aims to build upon the Critical Minerals Research, Development and Demonstration Program which is providing over $14M to the following projects:

Mixed Hydroxide Precipitate (MHP) Integration into Sherritt’s Fort Saskatchewan Metals Refinery – $795,524 for piloting the use of MHP in the production of high-purity nickel and cobalt metals
Direct Lithium Extraction (DLE) Pilot Project – $3.545M for supporting the development of a commercial plant that will extract battery-grade lithium
Direct Lithium Extraction Process Optimization – $1.074M for demonstrating innovative lithium extraction process from subsurface brines
Demonstration Plant (Search Minerals) – $5M for piloting extraction processes that aim to produce individual rare earth oxides
Battery Material Supply Chain Integration – $724,871 for demonstrating supply chain integration of battery-grade nickel sulphate and cobalt hydroxide
Recycling and Production of Rare Earth Oxides from Permanent Magnet Scrap – $3M for demonstration of REE recycling process from magnet scrap

The $1.5B added to the Strategic Innovation Fund brings the fund to a total of $6.9B across 110 projects. The current investment priorities are in clean technologies, critical minerals, and industrial transformationFunded projects include:

$700M for the Volkswagen Electric Vehicle Battery Plant
$47M to Advance Canada’s EV Battery Production
$36M to Advance Canada’s Semiconductor Industry
$25M for Building a Clean Future Through Renewable Energy

Based on these investments, Canada is making meaningful efforts in several areas, including: accelerating exploration activities and building its critical minerals project pipeline; expanding its downstream capabilities in manufacturing, processing, and recycling; streamlining regulatory processes; developing enabling clean energy and transportation infrastructure; advancing reconciliation with indigenous peoples; and promoting partnerships. These investment areas show positive alignment with Canada’s stated priorities. Although Canada’s strategy outlined initiatives and key actions to grow its workforce, no meaningful investments in this area were announced. The mining industry as a whole faces an unprecedented skills shortage, with Canada being no exception. Forecasts show that Canada will need up to 113,000 new workers by 2030 to meet the growing critical minerals demand. These workforce and skills challenges will be addressed in a later installment – stay tuned.

Now, looking at Australia, its most notable strategic investments are summarized in the following infographic:

Some of the most outstanding projects and collaborations generated by these strategic investments include:

The $225M of total investment into the Exploring for the Future Program which supports exploration activities and precompetitive geoscience data. Its current projects include three national drilling initiatives, geological mapping projects, and an evaluation of Australia’s future energy resources, among many other projects.

The $100M investment through the Critical Minerals Development Program into several Australian critical mineral industry entities. The list of recipients consists of mostly midstream processing and refining projects, including:

Australian Energy Storage Solutions Pty Ltd received $5.46M to pilot a precursor cathode active material manufacturing plant
Magnium Australia Pty Ltd received $6.25M to pilot a magnesium refinery plant and commercialize its patented magnesium metal extraction technology
Australian Strategic Materials Ltd received $6.5M to support the development of its Dubbo Project, a mining, separation, and production facility for certain REEs, along with other critical minerals

The $50.5M investment to establish the Australian Critical Minerals Research and Development Hub, which aims to commercialize critical minerals R&D and support strategic international collaboration and science diplomacy. Its current research projects include: a criticality and opportunity assessment to help guide strategic investment and policy-making; the development of processing routes for high-purity silica production from Australian resources; and the development of pathways for Australian High Purity Alumina (HPA).

The $2B of total investment through the Critical Minerals Facility (CMF) to support strategic critical mineral projects, including:  

$1.25B to Iluka Resources to develop its Eneabba Rare Earths Refinery project
$185M to Renascor Resources to develop its vertically integrated mine and manufacture Siviour Graphite Project
$40M to EcoGraf to develop a battery anode material facility

The $500M added to the Northern Australia Infrastructure Facility (NAIF) to support downstream critical minerals processing projects. To date, the NAIF has committed $4 billion to help finance projects in northern Australia across several industries. Its critical-minerals-related projects include:

$220M to develop the Yangibana Rare Earths Project
$140M to develop the Lake Wells Sulphate of Potash Project
$125M for the expansion of Pilbara Minerals Limited’s Pilgangoora Operation

The $5B investment through the National Reconstruction Fund (NRF) and its stated priority areas: $3 billion for renewables and low emissions technologies, $1 billion for value-adding in resources, and $1 billion for advanced manufacturing.

The $57.1M investment in securing strategic partners and building supply chains will be facilitated through the Critical Minerals International Partnerships Program, supported by a 4-year $2.2M investment in advancing foreign investment tracking to ensure alignment among partnerships.

The $6.65M and $6.7M investments in supporting initiatives to increase global critical minerals engagement and to help Austrade boost international engagement on critical minerals, respectively.

The 10-year $120B Infrastructure Investment Program supports critical mineral projects through the development of enabling infrastructure, primarily energy and transportation infrastructure.

Significant investments to attract and educate a skilled workforce, including:

The $3.1B Australian Apprenticeships Incentive System prioritizes clean energy employment and offers financial and training support to eligible employers;
The $504M investment to support the Jobs and Skills Councils in identifying sector-specific skill requirements, developing training products, and supporting collaboration between industry and training providers;
The 9-year $105.1M New Energy Apprenticeship and New Energy Skills programs will support 10,000 eligible apprentices with the cost of living and provide industry-based mentoring, peer support, and networking opportunities;
The 12-Month $1B Skills Agreement will deploy training placements in priority areas of the economy including the manufacturing and technology sectors. Another $400M will be added in 2024 through the National Skills Agreement.

Australia’s strategy provides a much more extensive overview of its investment initiatives. Like Canada, Australia is deploying meaningful capital toward their stated priority areas, such as exploration, advancement of downstream capabilities, and development of enabling infrastructure. Australia’s strategy gives more detail as to how this capital will be distributed; it’s relying heavily on programs and pathways with proven track records in funding and supporting projects. In contrast to Canada, Australia has outlined a handful of programs and initiatives backed by substantial investments to address its workforce challenges.

In summary, Canada and Australia’s Critical Minerals Strategies share their visions and commitment to nurturing sustainable and resilient critical mineral sectors. Both countries recognize the significance of critical minerals in the global transition to clean energy technology and acknowledge the need for expanding capabilities across the entire value chain. Evaluating each country’s investment initiatives highlighted that both countries are focused on supporting key areas such as exploration, downstream capabilities, strategic partnerships, economic growth and job creation, and Indigenous engagement. Canada’s overall strategic approach provides more clarity across the entire critical minerals value chain, while Australia’s strategy is backed by more substantial investments and proven programs, particularly in addressing workforce challenges. The remaining articles in this series will address downstream activities, regulatory hurdles, strategic partnerships, and workforce challenges in more detail – stay tuned for our future installments in this series.

About The Author

Drew Hamilton is a recent engineering graduate from Carleton University, specializing in sustainable and renewable energy. With a strong educational background in this field, Drew is passionate about continuous learning and dedicated to building a sustainable future.

Currently serving as an Energy Systems Analyst at Zero Nexus, Drew is deeply committed to understanding the intricacies of the mining industry’s challenges and contributing to the wider clean energy transition. Through this role, he aims to explore innovative solutions and pave the way for sustainable practices within the mining sector.

Join Drew as he explores the intriguing challenges and opportunities at the intersection between decarbonization, renewable energy, and the mining industry. With his insights and commitment, Drew aims to inform and inspire readers, fostering dialogue towards a cleaner, more sustainable world.

About Zero Nexus

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