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Industrial Equipment Manufacturing employees at an announcement by Federal Minister of Natural Resources Jonathan Wilkinson and B.C. Minister of Energy, Mines and Low Carbon Innovation, Josie Osborne, in Surrey, B.C., on July 15.DARRYL DYCK/The Canadian Press

Marilyn Spink is a fellow of the Canadian Academy of Engineering and director of operations at the Canadian Critical Minerals and Materials Alliance.

The global energy transition means the reindustrialization of the West after 50 years of deindustrialization and offshoring. For Canada, reindustrialization presents a huge opportunity to support nearshoring or friendshoring of the materials and components needed to enable this energy transition. Without an industrialization strategy, however, Canada will stay trapped in a “resource curse” – in which countries rich in mineral resources are unable to leverage their resource wealth to boost economic growth.

In the past, pricing trends for well-established commodities such as copper and commodity-grade nickel informed where the markets were and where they were headed, and, in turn, where to explore, invest and develop. Canadian companies enjoyed success using a “commodity supply push” or an “if you build it, they will come” approach. But this will not allow us to leverage this once-in-a-generation opportunity for Canada, because the materials required to enable the global energy transition are not commodities.

Instead, specialized, often low-volume materials that meet customer specifications are required. It’s not the rocks out of the ground, or mineral concentrates, but value-added converted and refined mineral-to-material inputs demanded by downstream customer products and applications. It’s not lithium minerals used in batteries, but lithium-based chemicals.

Canada has both well-developed mining and manufacturing sectors that deliver strongly on social and environmental performance, which is our globally competitive advantage. The “mid-stream,” however, is largely missing. And this is where the real value to the Canadian economy and future job creation resides.

What Canada commonly refers to as critical minerals have traditionally been known as industrial minerals, which are bought and sold differently compared with well-established commodities. In this market, customers employ a “demand pull” approach by signing off-take agreements with materials suppliers. Downstream manufacturing customers work closely with their materials suppliers, who in turn partner with mineral, chemical and gas suppliers to secure their input supplies to meet their customer material demands.

Off-take agreements specify technical parameters, chemistries, allowable impurities, volumes, delivery, packaging and pricing requirements, to name a few. Increasingly, off-take agreements also contain minimum social and environmental performance criteria acceptable to the customer.

It is therefore much more complex to make battery-grade nickel to meet the demand of a customer’s end-use requirements than to simply produce commodity-grade nickel and push it into the market. But it is exactly in these more complex chem-tech and metallurgical industries, generally comprised of SMEs, where Canada needs to bridge the “mid-stream” gap between mining and manufacturing. An industrialization strategy will help build that.

To truly leverage the country’s critical-mineral wealth and the tremendous potential of the global energy transition, Canada must resist framing this opportunity as a mining story. After all, Canada has only opened a handful of new critical-minerals mines in the past 20 years. It would be more productive and beneficial to frame policies around the reindustrialization for Canada because the real wealth is generated by turning minerals into value-added materials.

To establish the missing middle, actions from the private sector and governments are needed. In the private sector, mid-stream material processors must work closely with minerals producers, who in turn will inform the junior exploration sector which minerals to focus exploration on five years from now to meet the specialty material demands for products that have not yet been invented.

Meanwhile, the government must develop a comprehensive reindustrialization strategy and enabling policy initiatives, in collaboration with business and our financial sector, complete with actions and timelines. Actions must include setting industrialization priorities, initiatives and policies to build talent pools, as well as regulations to support desired outcomes, and to continuously map and engage stakeholders. This would include policies to ensure any tax dollars going to foreign and Canadian companies come with the recipients’ commitment to seed and champion natural spinoff industries, and to procure Canadian-produced materials.

Canada has a critical-minerals strategy. What is urgently needed is a reindustrialization strategy to add value to our own raw materials instead of continuing to allow others to do so. Canada should not miss out on tremendous wealth-creation and national-security opportunities by continuing to look at critical minerals as just a mining story. Otherwise, the negative effects of our “resource-cursed” economy will deepen.

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