Taking action in support of our vital natural resource sector

Is the world mining enough minerals and metals to support a full transformation of our energy systems from fossil fuels to renewables?

Is China still the dominant player in the critical materials used in modern energy technologies such as wind, solar and EVs, and if so, what implications does that have for the West?

Is Canada doing its part to provide the world with the minerals and metals it needs for such technologies?

These are all good questions, answered more or less via analysis of the annual World Mining Data report released earlier this month.

Heather Exner-Pirot, Director of Energy, Natural Resources and Environment at the Ottawa-based Macdonald-Laurier Institute, has shared much-needed insight into the World Mining Data report's findings while shedding some light on the answers to these important questions above. Also see:

• Canada Ranks 2nd for Best Lithium-Ion Battery Supply Chains
• Canadian Mining Infographic: Facts, Figures & More!
• Canada Has the Resources & Know-How to Lead in EV Tech

We Need More Mining Globally, But…

According to the report, global mining production has plateaued. But will this “peak” reverse itself? Exner-Pirot points to financial challenges in the global mining sector, as outlined by the Prospectors & Developers Association of Canada (PDAC).

Global mining production has plateaued. But are there near term prospects for the trend to be reversed? No! Global mining financing is anemic, constrained by high interest rates and price volatility. Barely 1/3 what it was in 2013 😳 https://t.co/cMiwqHBZxR https://t.co/xcRfRBuMWK pic.twitter.com/x8umNzp0fi

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

Exner-Pirot refers to the latest figures from the World Mining Data 2023 report, which shows that “…the world produces less minerals in 2021 than in 2019.”

In conjunction with a lack of new investment, it seems the world is not on track to produce the significant amount of new mined materials required to meet the IEA's net zero by 2050 scenario.

In fact, mineral production growth has slowed to a halt. The world produces less minerals in 2021 than in 2019. /2 pic.twitter.com/xnGkVtf4Vd

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

It is no secret that China has been looking to dominate global mining markets by not only onshoring all processing of these materials, but also investing in foreign mines to gain ownership of the minerals and metals required for advanced energy technologies ^[1].

The following graph shows China’s dominance in the global mining sector:

China is absolutely dominant, with a a quarter of production. China, USA, Russia and Australia account for over half of mining production. /3 pic.twitter.com/UHnj69dVtR

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

But what about Canada’s role in the global mining sector? Despite being the second-largest country on the planet, we have a long ways to go to become a significant player in the sector – currently ranking eighth in global mining power.

Exner-Pirot also points out that China’s dominance in the global minerals and metals markets should be a concern for us all if we value secure supply chains.

China is the top producer of 29 different commodities. This is pretty bad for supply chain security. Doesn’t even account for their additional processing and refining dominance. /5 pic.twitter.com/GrfVgCGgvb

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

According to Exner-Pirot, the “energy transition” from liquids-based energy systems to ones made from mined materials poses a significant security threat, mainly because these commodities are much more geographically concentrated than fossil fuels.

What happens if Western countries are cut off from these materials upon geopolitical disputes, much like what happened between Europe and Russia early in 2022 with oil and natural gas supplies?

One reason the energy transition poses security issues is that minerals are much more geographically concentrated than fossil fuels. Whereas oil, gas & lignite are everywhere, things like nickel, uranium, lithium, aluminum, graphite, magnesite, REEs are produced in few places /6 pic.twitter.com/ByIy4XuAyC

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

Last, but not least in her analysis of the World Mining Data 2023, Exner-Pirot shows us what the report says about the relative stability of the jurisdictions producing the world’s minerals and metals.

And lots of those places are unstable or extremely unstable. Problems will arise.
As we unwind dependency on fossil fuels we will need more, and more diverse, sources of minerals. This report shows it’s not happening yet. /7x pic.twitter.com/pI6oVpAqmH

— Heather Exner-Pirot (@ExnerPirot) May 3, 2023

Many questions remain:

> What countries would you choose to get your minerals and metals from?

> Which nations seem like they would be a stable, responsible and reliable source of supply for the mining commodities needed to manufacture modern tech that we rely on day in and day out?

> Can Canada do more to provide the world with mined goods to reduce our reliance on less stable and reliable autocratic supply sources?

Mining in Modern Society

Exner-Pirot’s analysis of the World Mining Data 2023 shows us the significant risks of relying on foreign jurisdictions for the raw material inputs required for modern society to exist.

Computers, smartphones, electric vehicles, solar panels, hydro dams, wind turbines, nuclear plants, residential homes, skyscrapers, appliances, boats, airplanes, cargo ships, machinery --- the list of uses for minerals and metals goes on, and on.

It's hard to think of any product we use today that doesn't use some material mined from the earth. And there is no shortage of demand for these commodities, with mineral demand for battery tech and EVs, for example, projected to grow at least 30 times by 2040 ^[2].

We Must Focus on Resource Security

The recent war in Europe has reminded the world of the importance of secure and reliable supply chains. Since then, government officials worldwide have now placed energy security at the forefront of many newly enacted policies as they attempt to balance these concerns alongside continued climate action. Following suit are growing concerns over the security of other resources such as food, minerals and metals.

Canada, Europe, Kapan, South Korea, Australia, the U.S. and the rest of our closest allies and trade partners must now look to metal and mineral security as the next significant security risk. We must sustainably develop our own mines at an expedited pace if we ever hope to attain resource security and prevent a scarcity of resources that ensure we have an abundance of access to food, water, energy, etc., and which also form the basis of protectionary measures that ensure the safety of our people.

Canada’s wealth of untapped minerals and metals such as copper, lithium and rare earth elements means we can do more to help provide resource security to Canadians and our allies. Our country must act now to prevent the dominance of less responsible and reliable jurisdictions on global mining markets for the sake of our own security.

Today’s concern is energy, but as analysis from experts like Exner-Pirot shows, tomorrow it very well may be minerals and metals.

Let’s not make the same mistakes we did yesterday and support the development of a healthy mining sector here in Canada. This will make the world a better place, while benefitting Canadian and Indigenous families!

SOURCES:

_{1 - Politico Magazine (2022, December 14). Rare Earth Mines. Retrieved May, 2023, from https://www.politico.com/news/magazine/2022/12/14/rare-earth}

_{2 - International Energy Agency. (2023). The Role of Critical Minerals in Clean Energy Transitions. Retrieved May, 2023, from https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions/executive-summary}