On March 11, 2021, Minister of Natural Resources Seamus O’Regan, Jr. announced the release of Canada’s new critical minerals list, which includes 31 minerals “…considered critical for the sustainable economic success of Canada and our allies”. The 2021 list makes several changes from Canada’s less-formal 2020 list (PDF) by deleting zirconium, selenium, phosphate, beryllium, and barite, and adding copper, helium, gallium, germanium, tin, uranium, and zinc.
What is a Critical Mineral?
While there is no comprehensive definition of “critical” mineral, it is generally understood to mean a mineral that:
- is a necessary ingredient for the modern economy and emerging technologies; and,
- faces high supply chain risks.
To be “critical”, both aspects must be present. A mineral that is necessary for the modern economy but does not encounter supply chain risks may not be “critical”.
The criticality of a mineral varies from country to country, determined by surrounding context and the interests of each country’s government or governments. Countries subjectively determine mineral criticality based on a confluence of factors, including their natural resources, position within the global supply chain, geopolitical concerns, and internal political agendas.
By leveraging Canada’s abundant natural resources, free and fair markets, political and legal stability, and preferred access to global markets, the Canadian government endeavours to make Canada “a leading mining nation” and “the global supplier of choice for clean and advanced technologies.” In determining which minerals are critical, the Canadian government has prioritized those that:
- can be produced in Canada;
- are essential to domestic industry and security;
- have the potential to support secure and resilient supply chains to meet global demand and on which Canada’s allies can rely; and
- are required for developing low-carbon, digitized technologies.
Why Create a Formal List Now?
Canada’s previous, less-formal Critical Mineral list was not an explicit declaration of the Canadian government’s views on mineral criticality. The 2020 list was based on minerals that have been identified as critical by Canada’s key trading partners, and that can be found in Canada. Hence, although it took into account Canadian mineral supply, the previous list reflected the views of Canada’s key trading partners — namely, Japan, the European Union, South Korea, the U.S., and the U.K.
The 2021 list is a clear statement of the Canadian government’s intentions and priorities. It provides certainty to investors and Canada’s like-minded trading partners. That certainty will assist potential investors to predict how Canada may view in-bound investment by non-Canadians under the national security components of the Investment Canada Act.
Why Are Minerals Like Copper and Helium Now “Critical”?
The Canadian government has not commented specifically on the changes from last year’s less-formal critical minerals list. Natural Resources Canada says that it developed the 2021 list using a criteria-based approach in consultation with provincial and territorial governments and exploration, mining, and manufacturing industries and associations.
All the minerals that did not make this year’s formal list — zirconium, selenium, phosphate, beryllium, and barite — were industrial minerals.
Among the 2021 additions, copper, helium, gallium, germanium, and tin are of particular interest due to their implications for developing low-carbon, digitized technologies:
- Copper is an essential ingredient for electric vehicles (EVs), which employ two to four times more copper than internal combustion vehicles. As EVs become more affordable and more widely used, Natural Resources Canada anticipates an increase in the need for copper production. Copper is also used for many other emerging and clean technologies such as solar cells.
- Helium is necessary for many important scientific, medical, and industrial technologies, including MRI machines. It is a unique resource that is non-renewable and for which there is no substitute. It is also in short supply. Canada has the fifth-largest helium resources in the world, and only a handful of other countries have significant helium deposits—namely, the U.S., Qatar, Algeria, China, and Russia. With the U.S. government actively depleting its helium stockpiles, Canada’s allies will look to Canada to support their helium supply chains.
- Gallium and Germanium are both used in many advanced, energy-saving technologies, including light-emitting diodes (LEDs) and semi-conductors.
- Tin acts as the glue of digital technology, which binds together the circuitry of electronics such as mobile phones, laptops, and smart televisions.
If you have questions about Canada’s critical minerals and supply chain security and resilience, please reach out to a member of Fasken’s Global Mining or National Security groups. Fasken has significant experience advising companies and other stakeholders on all aspects of critical minerals.