Canada currently lacks critical minerals to meet future demand from large battery plants, according to a government document that highlights major gaps in the supply chain. Tens of billions of dollars will need to be invested to open five times as many mines as normal within 10 years or the success of battery plants “could be at risk.”
Multinationals Volkswagen, Northvolt, Stellantis and LG “told us that they established themselves in Canada because of access to minerals and that it is unlikely that they will be able [de fabriquer des batteries] with a strategy that depends on the import of minerals,” reads a government document that describes a meeting of a committee on clean growth attended last December by senior officials from several federal departments.
“Without a secure supply of critical minerals, the success of electric vehicle battery plants could be at risk,” reads the analysis, originally released by The Logic.
However, Canada is currently in a delicate situation, to say the least. We learn that the quantity of critical minerals extracted from Canadian soils – including nickel, graphite and lithium – is far from being able to supply the battery industry: “Canada has less than 50% of the necessary mineral production and less than 25% of the intermediate production needed to supply four battery factories for electric vehicles.”
Catching up will come at a cost. The analysis suggests that investments totalling $24.1 billion will be needed “to meet 100 per cent of the demand” for critical minerals from these plants and “make Canada self-sufficient” in these elements. Without this production, battery plants will be largely dependent on imports.
Canada is now in a race against time. “Fifteen more mines are scheduled to open over the next decade. […] The pace of opening new battery metal mines must increase fivefold by 2035 to fully support domestic battery production,” the document reads. A major challenge given that a mine normally takes 16 years to be operational.
Contacted by The Pressthe office of Canada’s Minister of Natural Resources believes that the success of the sector is not threatened. “The Canadian mining industry is on an upward trajectory,” responds by email the department’s director of communications, Joanna Sivasankaran.
She points out that Ottawa is deploying measures to promote this sector, such as investments in infrastructure, tax credits for exploration and “a plan to reduce regulatory red tape so that good projects are built more quickly.”
Avoiding Vulnerabilities
In its Critical Minerals Strategy published in 2022, the government recalled the significant presence of these elements on the territory. This mining potential was then presented as a strategic advantage with regard to China, for example.
It said: “Canada’s European allies have recently seen the cost of depending on countries with different values for supplies of strategic commodities like oil and gas; and there is a strong desire to avoid such vulnerabilities in emerging markets such as critical minerals.”
Since 2023, announcements in the sector have multiplied. A subsidiary of Volkswagen, a joint venture formed by Stellantis-LG Energy Solution and the manufacturer Honda have successively announced the construction of battery manufacturing plants in Ontario. For its part, the Swedish company Northvolt has chosen the South Shore of Montreal to set up shop.
These private investments will total more than 46 billion Canadian dollars, according to government documents consulted by The PressUnder the agreements with the first three plants, government assistance will range from C$4.6 billion to C$15 billion for each plant, for a total of C$32.8 billion, with one third of the cost being covered by Ontario and Quebec.
Several questions
“The mineral supply chain for the battery sector is in its very early stages of deployment in North America,” wrote a spokesperson for Northvolt in Quebec, Emmanuelle Rouillard-Moreau, by email, when asked about the challenge of sourcing critical minerals: “Investments like the one we are deploying in Quebec can support and stimulate the development of this chain.”
As for him, the specialist in energy materials at Polytechnique Montréal, Gregory Patience, raises questions about the impact of this imbalance between the production of minerals and the demand from future factories.
First of all, there is this ability to open so many mines in such a short time. “Even if 15 new mines [de minéraux critiques] “If battery factories are to come into operation within 10 years, how will they supply themselves by then? Will they have to import?”
Mr. Patience points out that several of the planned mines may not see the light of day: “It is not because there is a mining project that it will one day be in operation. It is itself in competition with other productions throughout the world.”