Critical Battery Minerals May Help Nurture Canada’s EV Sector

OTTAWA – The Canadian and Ontario governments are promoting the development of critical mineral production needed for batteries to fuel electric vehicle batteries, looking to leverage the country’s vast mineral wealth in building a domestic EV sector. 

The federal government in Ottawa released a Canadian Critical Minerals Strategy in December. It includes a commitment to spend C$3.8 billion ($2.8 billion) on developing critical minerals production, prioritizing key EV battery elements lithium, graphite, nickel, cobalt, copper and rare earth.

The government also has earmarked C$1.5 billion ($1.1 billion) for infrastructure development around critical mineral supply chains.

Canada is a significant exporter of copper ores and concentrates to the European Union (EU) – €461 million’s ($503 million) worth sold in 2022; nickel (€173 million [$189 million)); and graphite (€1.2 million [$1.3 million]), according to EU statistical agency Eurostat. 

Canadian battery-minerals mining

To the U.S. in 2022, Canada exported C$133 million’s ($98 million) worth of copper ores and concentrate, and C$17 million’s ($12 million) worth of graphite, says Statistics Canada. 

The Ontario government is also active. It released its own Critical Minerals Strategy 2022–2027 last May, which includes commitments for investments, research and regulatory rationalization promoting production of EV-focused minerals. 

The province has, for example, an Ontario Junior Exploration Program funding critical mineral development projects, announcing in February C$5.8 million ($4.3 million) in spending on smaller companies developing projects yielding minerals for EV batteries and other technologies.

For Canada, the world’s second-largest country by acreage, minerals are a competitive advantage. The national Invest in Canada agency released a report noting: “Canada is the only country in the Western Hemisphere that has all the critical minerals required to manufacture EV batteries: graphite, nickel, aluminum, lithium, copper, cobalt, manganese, molybdenum and rare earth elements.”   

Potential Is Backed Up by Geological Data

The U.S. Geological Survey (USGS) says Canada has 2.9 million metric tons of identified lithium reserves – mostly untapped – and has 220,000 tons of identified cobalt reserves (3,900 tons mined in 2022). Canada is a major player in nickel, another key BEV mineral, with reserves of 2.2 million tons and 130,000 tons mined in 2022, says the USGS.

It is the same for aluminum, with smelter production of 3 million tons in 2022. Canada has 6 million tons of graphite reserves, says Canada’s natural resources ministry, and mined 15,000 tons in 2022, says the USGS.  

Snow Lake Lithium graphic (Arena EV)

Canada is also a potentially major producer of rare earths, with 13 ongoing mine development projects and estimated resources of 14 million tons, says the USGS.

The U.S. produces more copper than Canada, which produced 530,000 tons in 2022 from 7.6 million tons of reserves.

Canada produced more critical minerals than the U.S. in 2022 regarding cobalt, nickel, graphite (zero American production) and aluminum, so exports could be in play. American production of rare earths exceeded Canada’s, but its resources are lower at 3.6 million tons, says the USGS.

As for lithium, the USGS has withheld production data for the country’s one mine in Nevada.

This critical mineral bounty is attractive to EV battery makers. But Vic Fedeli, Ontario economic development, job creation and trade minister, tells Wards they would be used as a “bargaining chip” to ensure processing and battery production is established in the province.

“It's not just the fact that we have minerals here. They will be processed here,” he says, pointing to a January speech by Ontario Premier Doug Ford, who said: “Everyone's here wanting to get the minerals. I have one condition. You can have our lithium as long as you’re manufacturing the batteries here.”

Ford said the same applied to cobalt, graphite or nickel (although significant amounts of Canadian graphite and nickel are already exported). While provinces have shared jurisdiction over mines in Canada, Ford has not yet specified how Ontario would ensure local critical minerals are processed locally. 

Vic Fedeli_0_4

Benefits for automakers also include ethical mineral sourcing, says Fedeli, a point underlined last November by Pierre Gratton, the Mining Association of Canada’s president and CEO: “Who wouldn’t want to buy an EV knowing it contained Canadian metals and minerals and was built in Canada using our high labor standards – particularly when the alternatives currently come from jurisdictions where these very bonafides are decidedly lacking?”

David Adams, president and CEO, Global Automakers of Canada, also argues that “Canada needs to be strategic with its critical minerals and materials to avoid the scenario where it is shipping low value-added material to the U.S. for processing.”

While Canada is “well placed to supply a preponderance of critical minerals, we need to develop our processing capabilities,” he says. If that happens, the planned Stellantis and Volkswagen battery plants in Ontario “will benefit from secure supply and short distances to the facilities relatively speaking,” Adams says.

The Canadian government could also encourage automakers to assemble EVs in Canada: “Manufacturers are increasingly becoming more vertically integrated as they transition to EVs so that a strong Canadian supply chain would be helpful,” Adams says.

Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers’ Assn., sees value in an integrated North American supply chain “from mineral exploration to production for these elements (which) presents a generational opportunity for job creation and economic growth.”

To make this work for Canada, alignment with U.S. regulations and trade rules on EVs are important, “so we are full participants in the transition to EVs,” Kingston says.