Canada Wants To Increase Critical Mineral Production, But China's Involvement Raises Concerns

A recent independent economic impact analysis conducted for the Mining Association of British Columbia (MABC) has revealed that 16 proposed critical mineral mines in the province of British Columbia could generate significant economic benefits.

What Happened: A study by Mansfield Consulting found that these mines represent a near-term investment of C$36 billion, could create 300,000 person-years of employment, and contribute C$11 billion in tax revenues.

"This is a generational opportunity that must be seized and could position BC as a leading global supplier of responsibly-produced critical minerals. We want to move forward with the Governments of Canada and British Columbia, First Nations, local governments, and labor, to unlock critical mineral developments for the benefit of all British Columbians," said MABC chief executive Michael Goehring.

British Columbia plays a vital role in global mining. It houses 10 metal mines, seven steelmaking coal mines, and two smelters. It is Canada’s leading producer of copper and steelmaking coal, the second-largest producer of silver, and the sole producer of molybdenum — a key component in high-strength steel alloys. According to the International Energy Agency, global demand for critical minerals is expected to increase six-fold by 2040.

Now Read: Supreme Court Shuts Down Alaskan Pebble Mine Ambitions

Why It Matters: The 16 proposed mines, along with two mine extensions, would enhance the province’s standing as a key global mining jurisdiction. While British Columbia is known for its slow bureaucracy and lengthy delays for mining permits, the provincial government is striving to work on this issue.

The MABC study also evaluated the economic benefits of five proposed precious metal mines, including gold. The long-term combined impact of these precious metal mines is projected to exceed C$29.5 billion, creating over 96,000 person-years of employment and generating C$5.3 billion in tax revenue.

As Canada positions itself to become an alternative to the Chinese rare mineral market, the country is struggling to break away from its Beijing creditors.

Vital Metals VML, an Australian company that owns the Nechalacko mine project, just sold a 9.9% stake to Shenghe Resources (SHA: 600392). It also agreed to sell A$2.6 million worth of stockpiled rare earth material.

While Ottawa announced a virtual ban on Chinese acquisition of Canadian mining companies, Montreal-based SRG Mining Inc.SRG, could still go through its C$16.9 million, 19.4% stake sale to Carbon ONE New Energy Group. The deal would see it move its headquarters outside of Canada.

Such moves have sparked feisty debates in the country, including discussions in the parliament.

“Beijing-backed raiding of Canadian assets and resources have reached an all-time high,” said Shuvaloy Majumdar, a Member of the House of Commons of Canada, questioning whether the minister will invoke The Investment Canada Act (ICA) which allows the government to review foreign investments and ensure they're not harmful to Canada's national security.

While ICA sets guidelines for authorizing certain foreign investments, very few takeover bids have ever been denied.

Now Read: Mining Milestone: Rio Tinto To Launch World’s Largest Project In Guinea’s Simandou Mountains

Image: Shutterstock