Teck Resources CEO Jonathan Price says North American governments should be more aggressive in providing direct investment in the critical-minerals sector. Though Canada and the United States have invested tens of billions in battery metals manufacturing plants, Mr. Price said, those same governments have lagged in their support for mines and processing plants.JIM ROSS/The Globe and Mail
Teck Resources Ltd. TECK-B-T chief executive officer Jonathan Price and U.S. Ambassador to Canada David Cohen have markedly different views on the role of government in addressing China’s dominance in critical minerals.
Speaking at an event in Ottawa Thursday organized by the American Chamber of Commerce in Canada and the Business Council of Canada, Mr. Price called for far more aggressive direct investment in the critical-minerals sector by North American governments.
Ottawa has committed $3.8-billion to fund the industry over eight years, but Mr. Price pointed out that China invested US$20-billion in 2023 alone, which was used in large part to expand its access to critical minerals abroad.
While Canada and the United States have invested tens of billions in battery metals manufacturing plants, Mr. Price said, the same governments have lagged in their support for mines and processing plants.
“Support for car and battery plants absent support for the mines needed to supply them is like starting a farm-to-table restaurant without bothering to plant the farm,” he said.
China has the ability to flood the market, drive down commodity prices and “make it impossible for companies to justify investing in new supply when there’s no hope of a reasonable return,” he added.
He called for more ambitious and strategic government support if Canada and the U.S. are going to have any chance of competing against China.
But Mr. Cohen argued in his remarks that the U.S. government in particular has already done a great deal to directly fund early-stage North American critical-minerals companies, including quite a few in Canada.
Through the Defense Production Act, the U.S. has awarded about US$90-million in grants to Canadian companies over the past year, including Graphite One Inc. and South Star Battery Metals Corp.
In some cases, the U.S. has paired up with Canada in jointly funding companies such as Fortune Minerals Ltd., Lomiko Metals Inc. and Electra Battery Materials Corp.
While government support is important for stimulating private investment, it can’t be the primary party to solve the problem of Chinese dominance, Mr. Cohen said.
“For too many people, the solution to every problem is government, and government is not going to solve this problem,” he said. “This problem ultimately will be solved by the private sector.”
Citing the example of Western countries eventually cracking OPEC’s dominance in the energy sector, Mr. Cohen argued it was primarily private-sector investment that was paramount in loosening the cartel’s influence.
Both Canada and the U.S. are bit players in the global market for many critical minerals used in lower-carbon energy, such as lithium, graphite, cobalt and battery-grade nickel.
China dominates the supply chain of many of these minerals and has used its power to crush foreign competition. This year major global mining companies have been forced to shutter some of their nickel mines owing to a flood of Chinese-controlled products coming out of Indonesia.
In May the U.S. imposed steep tariffs on Chinese imports of electric cars, lithium-ion batteries and many critical minerals, including graphite, cobalt, aluminum and ferronickel. Canada followed suit in August with tariffs on EVs, steel and aluminum products from China.
Vancouver-based Teck is one of Canada’s biggest critical-minerals companies. In July it closed the sale of 77 per cent of its metallurgical coal business to Glencore PLC of Switzerland in a US$6.9-billion deal. The other 23 per cent was sold earlier in the year to Japan’s Nippon Steel and South Korea’s POSCO.
Over the past few years, Canada has cracked down on Chinese investment in its critical-minerals sector. In 2022, Ottawa said that only under exceptional circumstances would it allow Canadian critical-minerals companies to raise money from state-owned companies. Since then it has rebuffed several attempted deals between Chinese investors and domestic miners.