SECURING CANADA’S PLACE IN THE GLOBAL CRITICAL MINERALS RACE

Canada possesses significant reserves of six priority critical minerals—cobalt, copper, graphite, lithium, nickel, and rare earth elements—essential for the global energy transition. However, current investment is insufficient to meet a projected domestic demand of over $16 billion per year by 2040. The report identifies three primary risks deterring investors: financial volatility, environmental liabilities, and risks to Indigenous rights. To address these, the authors recommend that the federal government implement financial risk-sharing agreements (such as contracts for difference and equity investments), scale up capacity-building and capital access for Indigenous communities, and mandate global environmental standards for tailings management. The report warns that attempting to speed up project approvals by cutting environmental or consultation requirements is likely to backfire by increasing local opposition and litigation.

• Canada faces a significant investment gap to meet its domestic critical mineral demand, which is expected to reach over $16 billion annually by 2040. Meeting this demand requires approximately $30 billion in capital investment between now and 2040, necessitating the opening of more than 30 new mines.
• High price volatility in immature markets for minerals like lithium and rare earth elements, often influenced by China's market power, creates a significant barrier to securing project financing.
• Remoteness is a major driver of capital costs; mines located more than 50 kilometres from power lines have capital costs more than three times higher than those within that radius. Approximately $15.6 billion of the required $30 billion investment is linked to the need for infrastructure in remote areas.
• Indigenous consent and self-determination are essential for project success; failure to secure a 'social licence' is ranked as the third most significant barrier to investment, often leading to costly litigation and delays.
• Indigenous communities often lack the organizational capacity and financial capital necessary to participate as equity partners in mining projects, partly due to restrictive policies like the Indian Act.
• Environmental risks, particularly regarding tailings management and abandoned mines, threaten local water systems and public trust. The report notes that harmful substance exceedances in mines subject to federal regulations nearly doubled between 2018 and 2022.
• The report recommends that the federal government use an arms-length financial institution to provide risk-sharing tools, including equity investments, contracts for difference, and offtake agreements, to stabilize investor returns against price volatility.
• To reduce environmental liabilities, provincial governments should make compliance with international standards, such as the Global Industry Standard on Tailings Management (GISTM) or Towards Sustainable Mining (TSM), mandatory.
• Shortening regulatory approval timelines by reducing environmental safeguards or Indigenous consultations is likely to be counterproductive, as it often leads to longer overall development times due to community opposition and court proceedings.

APA

Canadian Climate Institute (2025). SECURING CANADA’S PLACE IN THE GLOBAL CRITICAL MINERALS RACE. https://climateinstitute.ca/wp-content/uploads/2025/06/Critical-path-Canadian-Climate-Institute.pdf

Chicago

Canadian Climate Institute. SECURING CANADA’S PLACE IN THE GLOBAL CRITICAL MINERALS RACE. 2025. https://climateinstitute.ca/wp-content/uploads/2025/06/Critical-path-Canadian-Climate-Institute.pdf.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=SECURING CANADA’S PLACE IN THE GLOBAL CRITICAL MINERALS RACE |date=June 2025 |url=https://climateinstitute.ca/wp-content/uploads/2025/06/Critical-path-Canadian-Climate-Institute.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2025securing, author = {{Canadian Climate Institute}}, title = {{SECURING CANADA’S PLACE IN THE GLOBAL CRITICAL MINERALS RACE}}, institution = {Canadian Climate Institute}, year = {2025}, month = jun, url = {https://climateinstitute.ca/wp-content/uploads/2025/06/Critical-path-Canadian-Climate-Institute.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }