EVs present a 'generational opportunity' in Canadian mining industry

Underpinning Canadian government and corporate plans for a homegrown electric-vehicle battery supply chain are the country’s deposits of battery minerals. But as automakers and battery companies invest in new or retrofitted plants to support the shift to EVs, mining experts warn that development of the mines and refineries at the base of the value chain is not keeping pace.

A “misalignment of timing” could leave mines in development as the rest of the sector moves forward, said Martin Turenne, president of FPX Nickel Corp., a Vancouver-based mining company working to develop a large nickel project in central British Columbia.

“You have the risk of retrofitting car plants or building new battery plants ... and having those, unfortunately, sit idle or at undercapacity because there won’t be enough raw materials as feedstock,” Turenne said.

Canada is already a major producer of nickel, the metal that makes up the largest portion of typical lithium-ion batteries today. In 2020, it produced close to seven per cent of the world’s nickel, making it the sixth-largest producer, according to Natural Resources Canada (NRCan).

But with roughly seven times more nickel than lithium by weight in a typical EV battery, the International Energy Agency (IEA) expects demand for the valuable commodity to balloon through the 2020s. In a May report, the organization said nickel demand will nearly double to about 5,000 kilotonnes in 2030 from 2,640 in 2021.

‘GENERATIONAL OPPORTUNITY’

Canada’s reserves of Class 1 nickel, the grade needed for batteries, give it the opportunity to advance its global standing, said Jeffery Lewis, a spokesman for Vale S.A., the world’s top nickel producer.

“There is a generational opportunity for Canada to anchor itself as the leading, most sustainable critical-mineral-producing jurisdiction for North America and Europe,” Lewis said.

The Brazil-based company has several large nickel mining and processing sites in Manitoba, Ontario, and Newfoundland and Labrador. It recently signed a longterm contract to supply nickel from its Canadian operations to electric-vehicle maker Tesla and has active dialogues with other automakers, cathode producers, cell manufacturers and recyclers, Lewis said.

It is also working to expand its Canadian operations.

Vale Canada expects to complete an expansion of its Voisey’s Bay mine in Labrador this year and has committed $150 million to extending the life of its mine in Thompson, Man. The company is also spending $890 million to refurbish its Copper Cliff smelting complex in Sudbury, Ont., Lewis said.

In Bécancour, Que. — a city midway between Montreal and Quebec City that is quickly becoming a hotbed for battery materials — Vale is also studying construction of a nickel-sulfate plant. The mining company wrapped up a pre-feasibility study in June, but the project still requires regulatory and company approval.

The proposed nickel-sulfate operation would be a first of its kind for the country as Canada does not currently have a plant capable of processing nickel into the form needed for EV batteries, said Photinie Koutsavlis, vice-president of economic affairs and climate change at the Mining Association of Canada.

If the project moves forward, Vale would join BASF, Posco Chemical and General Motors, which announced plans this spring to build a pair of cathode-active-material plants in the Quebec city.

“It’s definitely coming together in this one particular area,” Koutsavlis said, “and having Vale be able to come out with this pre-feasibility study brings a lot more credibility as well to start building that momentum for other companies to follow suit.”

‘THINK STRATEGICALLY’

Despite the progress, concerns about the timeline and scale of expansion needed to meet voracious EV battery demand in North America and beyond are pervasive.

Canada needs to “think strategically” and employ new models to more quickly eliminate risk from projects so industry can get new streams of critical minerals to market, Lewis said.

The federal government’s recent commitment to spend $3.8 billion on a critical-mineral strategy will spur more projects, Koutsavlis said. But the window for action is narrow.

“If Canada does not get out the door as quickly as possible ... to establish battery and critical-mineral value chains within this country, from exploration all the way to manufacturing and production, then we’re losing that opportunity to others,” she said.

With competing countries on Canada’s heels, Koutsavlis said, “it will all be for naught” if the federal government cannot speed up the permitting process to get more mines built.

“It’s not about cutting corners but about being able to get through the bureaucracy a little bit quicker,” she said.

Recent comments from Natural Resources Minister Jonathan Wilkinson indicate that Ottawa is aware that 10- or 15-year timelines for project approvals will block Canada from seizing the opportunity, Koutsavlis said.

In recent outreach that will help shape the federal government’s critical-minerals strategy, NRCan has called on industry to highlight ways that Ottawa can “streamline the regulatory processes to better facilitate project development.”

DOES TALK HAVE TEETH?

FPX Nickel’s Turenne is optimistic about the recognition of the issue but said he will wait to see whether the rhetoric “has teeth.”

Currently, he said, a battery metals deposit goes through the same approval process as other sites, such as gold mines. This is “nonsensical,” Turenne said.

“There’s a huge societal and environmental benefit to the development of battery metals projects that are different than things like gold that don’t have the same industrial use,” he said.

FPX’s project in B.C. has been in development for more than 10 years, Turenne said. “There’s probably another six to seven years left of development capital that needs to be applied,” he said.

Globally, approval timelines vary dramatically. According to the IEA, lead times for nickel mines range from four to 18 years. The organization also estimates that as many as 60 new nickel mines will be needed by 2030 to meet rising demand.

To get there, mine construction needs to start today, Turenne said.

“If we don’t, then we won’t be able to actually achieve the EV adoption targets that the federal government has set out both in Canada, in the United States and in other countries.”