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The importance of critical minerals for net zero

Electric car

The importance of critical minerals cannot be understated for Canada’s net-zero future. The global shift to a clean energy system and increasing demand for clean energy technologies alone will lead to a significant increase in demand for critical minerals.

Understandably, mineral need varies considerably by technology. As demonstrated in Figure 1, for batteries, lithium, nickel, cobalt, manganese, and graphite are crucial for performance, longevity, and energy density. Rare earth elements are critical for electric vehicles (EVs) and wind turbines and electricity networks need a “huge” amount of copper (which is a cornerstone for all electricity-related technologies) and aluminium. The figure below also depicts the importance of certain minerals for select energy technologies, noting their comparison against conventional technologies.

Fig. 1. Minerals used in selected clean energy technologies

Minerals used in select clean technologies

Source: International Energy Agency

The IEA is projecting that “mineral demand for clean energy technologies would rise by at least four times by 2040 to meet climate goals, with particularly high growth for EV-related minerals.” Recognizing the level of importance critical minerals will have for Canada’s net-zero future, Federal Budget 2022 lays several proposals on critical mineral value chain development, totaling $3.45 billion until the last three proposals run out in 2030.

Additionally, Global Advantage has identified roughly 30 Federal programs/initiatives/activities in the critical minerals value chain, most of them led by Natural Resources Canada (NRCan). Standout critical mineral initiatives include the Critical Minerals Centre of Excellence (established in 2021) which received $10.6 million in Budget 2022 over three years starting in 2023-24, on top of the $10.9 M it received from Budget 2021 and the Canadian Minerals and Metals Action Plan 2021, both under NRCan. Included in the list of activities are programs like the Strategic Innovation Fund, which can be leveraged to help promote innovations along the critical mineral value chain.

Provincially, Alberta, Quebec, Ontario, Newfoundland and Labrador, and Nova Scotia, have either published or are in the process of publishing updated mineral strategies to help support provincial development of critical minerals. Standout activities in the 36 provincial programs, policies, and acts GACG has found so far include Nova Scotia’s Mineral Resource Development Fund (which cites critical minerals as a focus for the 2022-23 intake period) and the Saskatchewan Research Council’s newly minted Rare Earth Processing Facility, a 2020 initiative that received $31 M from the provincial government.

In support of these federal and provincial priorities in critical minerals, GACG has begun compiling a database of mineral stakeholders and their activities, these groups are spread across government, academia, not-for-profits, private sector, and global markets in order to better identify major programs, initiatives, organizations, and ecosystem challenges and support gaps.

Read more about Global Advantage Consulting Group’s analysis of the 2022 Federal Budget here.

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