More support for northern critical minerals strategy, mining companies say

Mining companies with projects in the North say more federal support is needed following the release of Canada's new critical minerals strategy, while some environmental advocates are wary of the potential impacts.

Several projects in the North focus on critical minerals — so-called because they are considered critical to Canada's economy and strategic industries like clean technology — including zinc, copper, cobalt, bismuth, tungsten, uranium, and nickel. Canada's first rare earth elements mine, Nechalacho mine owned by Vital Metals subsidiary Cheetah Resources, opened in the Northwest Territories in 2021.

Robin Goad, president and chief executive officer of Fortune Minerals Ltd., said his company has been speaking with the federal government about critical minerals for more than five years, but has yet to see substantive action. Fortune owns the proposed Nico mine, a cobalt, gold, bismuth and copper project in the N.W.T.

"It's time we stop talking about this and actually (start) doing something," Goad said.

"We got this tremendous amount of money announced in the federal budget, but it's all smoke and mirrors right now."

The federal government released a strategy last month that aims to increase the responsibly sourced supply of 31 critical minerals. It's backed by $3.8 billion in the 2022 budget, including $40 million to support northern regulatory processes and a 30 per cent exploration tax credit for targeted minerals.

Goad believes support should be focused on advanced projects that can quickly transition into production like the Nico mine, as well as processing. He said once the company secures financing, it could begin production within three years.

Regulatory environments are "cumbersome and expensive," Goad added, and the N.W.T., whose economy relies on mining, is a high-cost jurisdiction with limited infrastructure.

The strategy aims to accelerate strategic projects, build sustainable infrastructure, reduce duplication and make assessments more efficient. It also plans to promote climate action and environmental protection, as well as advance reconciliation with Indigenous peoples.

Brandon Macdonald is the chief executive officer and director of Fireweed Metals, which owns the zinc, lead and silver Macmillan Pass project and the tungsten Mactung project on the Yukon-N. W. T boundary.

He said he'd like the government to extend flow-through tax credits as there is capital scarcity during the lengthy permitting process, as well as invest in infrastructure like roads, power grids, smelters and refineries.

"With increased resource nationalism around critical minerals, they're going to want to keep more of these products in the country, or at least with close allies," he said.

"It requires a bit of a leap of faith on government supporting these critical mineral projects and pushing that project forward."

Osisko Metals Inc. plans to resurrect the N.W.T.'s former Pine Point mine as a zinc and lead project. Chief operating officer and director Jeff Hussey said incentives are welcome, as exploration can be risky and it takes a long time to develop mines while Canada has set emissions reduction targets for 2030 and 2050.

"The sooner the better and the more encouragement the better, but I think we're off to a good start," he said.

Hussey said he'd like to see the permitting process made more efficient while still ensuring protection of the environment and communities.

The World Bank Group, in a 2020 report, found global demand for minerals used in clean energy technologies could increase nearly 500 per cent by 2050, with more than three billion tonnes needed to meet climate change goals.

Prime Minister Justin Trudeau visited Vital Metals' rare earth elements processing plant in Saskatoon on Monday as part of a three-day tour of Canada's battery supply chain. He spoke about the importance of reliable supply chains, environmental responsibility and partnerships with Indigenous people.

"This is the way the world is moving and fortunately Canada is extraordinarily well positioned to do just that," he said.

N.W.T. legislature member and longtime environmental advocate Kevin O'Reilly said he sees the strategy as a push for deregulation of the mining industry.

"I don't think that this is terribly helpful and I don't think that this is the right approach when it comes to the climate crisis," he said.

O'Reilly said these projects can be risky both financially and environmentally and more work should be done to examine the potential environmental and human health impacts from processing these minerals.

Jamie Kneen with MiningWatch Canada said the strategy ignores many issues relating to mining.

"What we've got here is a plan to promote mining, not a plan to really ensure that Canada's doing anything more than accelerating the kinds of extractive processes of an extractive economy that we're already engaged in."

Kneen said there should be greater emphasis on planning and co-ordination with Indigenous governments so communities can adequately engage with and respond to resource projects.

The federal government plans to discuss energy and resource priorities, including critical minerals, the territories and provinces.

This report by The Canadian Press was first published Jan. 17, 2023.

This story was produced with the financial assistance of the Meta and Canadian Press News Fellowship.