Andrew Forrest, the owner of the Wyloo Metals, a main company in Ontario’s Ring of Fire,1A significant mineral development region in the Far North of Ontario. recently raised issues with Canada’s regulatory overburden and called into question the viability of the entire project. The Ring of Fire is one of Ontario’s most significant economic opportunities, but the debate has been missing a critical aspect of why it matters: the role of global geopolitics.
Much like the oil industry, the critical minerals industry is geographically concentrated and lends itself to natural economic bottlenecks. China controls significant majorities and pluralities in every step of the value chain. Take as an example, cobalt. Cobalt, a mineral vital to battery production, is primarily located in the Democratic Republic of the Congo and is primarily mined in Chinese-owned mines. Through those mines, China controls 41 percent of global cobalt reserves. Building on this, China also has de-facto monopolies on the refining of extracted cobalt, followed by the production of battery materials, final battery assembly, and the majority of current global electric vehicle production.
This is a serious concern, as automakers scramble to find sources for the batteries to go into the new vehicles they have committed to. A cutthroat industry is emerging as automakers compete for limited resources and time, with a large emphasis on supply availability and understandable interest in developing new sources of minerals. In recent days, Ford Motors announced an 11-year partnership with a Quebec-based lithium mining company, while General Motors has put $650 million into developing a lithium mine in Nevada.
Chinese manufacturers do not face such pressures given their state control of foreign mines, and the Chinese electric auto industry has reaped the benefits. Today, China is the largest exporter of electric vehicles with 35 percent of global electric vehicle exports in 2022 coming from China, up from 25 percent in 2021. As shown above, North American automakers recognize the urgency of their position and are quickly trying to play catch-up.
States are also taking seriously the reality of extended reliance on China for all things related to the electric vehicle supply chain. As announced in Toronto at the 2022 Prospectors & Developers Association of Canada convention, the Mineral Security Partnership aims to find alternative sources of minerals and demonstrates a serious commitment on the part of the United States and Canadian allies. Tackling this issue will not be easy, but it is within our grasp.
On this issue, the federal government recognizes the permitting process is a problem, having admitted in their critical minerals strategy that it can take 25 years for a mine to become operational. Amidst fraying relations with China and with the self-interest of seeing domestic electric vehicle investments succeed, Canada must recognize that to see those investments succeed, it will need to take permitting reform more seriously.
How does Ontario fit in?
Ontario’s biggest deposit of critical minerals, the Ring of Fire, is and should be viewed as a historic generational opportunity that must be developed. The Ford Government has made great progress towards this and has been clear in the goals it has to develop the area with consideration for First Nations, broader Northern economic opportunity, and responsible resource development. In March 2023, the province approved the latest step in the environmental assessment process for the roads to the Ring of Fire. This warrants applause, given that this is historic progress Ontario has otherwise lacked.
The future economic opportunities, especially in Northern communities, will provide meaningful and gainful employment to hundreds of thousands, unquestionably raising their quality of life. Further, it will give a much-needed long-term boost to the provincial economy, and help make the premier’s commitments about Ontario supply chains become reality. More Canadian critical mineral resource development will honour the commitments we made in the Mineral Security Partnership while re-establishing Canada as a serious geopolitical player in confronting China while avoiding direct confrontation that Ottawa seems to loathe. This future is not one where environmental quality must suffer as we can lead on responsible resource development in remediation, Indigenous consultation, and damage mitigation. In the process, we will also eat away at China’s grip on critical minerals.
We can make this Canada’s future, and to enable this future, Canada and Ontario should take a series of steps.
The first is the incorporation of legislated time limits for government reviews in the environmental assessment process, which would begin to provide tangible timelines to project proponents. This is a concept that is widely used in the United States at both a federal level, where the government has up to two years to review a project before providing a report to assist decision-making. At the state level, California’s environmental assessment process also has statutory time limits and requires a report to be completed within one year once all materials are submitted. This is a concept Ontario should mimic.
Next, establishing a statute of limitations for court challenges to project decisions at both the federal and provincial levels will help give legal certainty to future projects, and will begin to reinforce expectations of reasonable time limits across the entire permitting process. As it stands, Ontario currently has legislation that explicitly assigns no limitation period on environmental claims. The province should amend this to create an explicit statute of limitations on permit issuance. By cutting down on excess litigation, there can be more effective uses of the courts’ time and allow projects to exit legal quagmires.
Finally, with a recent federal commitment of $40M in new funds for pre-development work, Ontario has a perfect opportunity to start a government-led environmental assessment process or engage in a 50/50 cost split for companies conducting feasibility studies into the Ring of Fire mineral deposits. While the roads to the Ring of Fire are still undergoing environmental assessments, this process will not be complete until 2028, so then having to await another assessment process afterward will make the whole project likely unattractive to any investors. Undertaking and completing assessments on the deposits themselves will provide proponents with development certainty, accelerate timelines and remove a crucial roadblock to investment.
It’s past time to get serious about reinvigorating Canada’s mining sector, and the best time to start being serious is today. Countering China, developing our domestic economy, and improving living standards for all Canadians can all be addressed by changing our policies on this issue. Ontario can demonstrate to the rest of the country what this looks like in advancing the Ring of Fire.
