China dominates each the manufacturing and processing house, and different governments – notably the U.S. and the European Union – are actually frantically making an attempt to construct their very own industrial capability. That would bode nicely for Canada’s mining sector.
“If you have a look at a price for Canada, you will have that low-carbon mineral manufacturing, which could be very complementary to what the entire transition is making an attempt to realize within the first place, however we even have that added provide chain safety due to our proximity to the U.S. market,” mentioned Brendan Marshall, vice-president of financial and northern affairs for the Mining Affiliation of Canada.
“The U.S. has the one largest vehicle-per-capita density nation wherever on this planet. So for those who’re a U.S. producer and you’ll supply these supplies competitively on a cost-competitive foundation from Canada, you’ll simply do this.”
But when Canada goals to be greater than only a provider of uncooked supplies, it wants a nationwide technique for growing a full-spectrum battery provide chain, say a variety of business teams, together with Clear Power Canada.
“The USA and the European Union have flagged their dependence on Asia, primarily China, for batteries and battery supplies as a serious threat to their auto industries,” the Clear Power Canada report states. “Each areas are working to restructure provide chains and supply extra batteries and supplies from their very own areas – and each areas have recognized Canada as a safe and steady supply of sustainable uncooked supplies.”
Canada is unlikely to develop an automotive EV battery manufacturing business. It merely can’t compete with international locations like China.
However there are alternatives for Canada in upstream and mid-stream sectors like mining, processing and refining, and even some downstream industries like part manufacturing, based on a newly shaped commerce group, the Battery Metals Affiliation of Canada (BMAC).
In a current report based mostly on a workshop in March, the BMAC recognized six areas the place Canada might develop industries associated to the battery provide chain, from mining to recycling.
Nevertheless, the BMAC warns, “This isn’t free-market competitors.”
It factors out that nationwide governments and areas, just like the EU, are implementing methods to safe battery provide chains. The Canadian authorities due to this fact must play a big position in an industrial technique for batteries.
Battery manufacturing isn’t prone to be a part of that technique. Canada has some battery manufacturing, but it surely serves area of interest sectors.
“Within the automotive battery house, like all issues automotive, it’s extraordinarily cutthroat with respect to prices and value,” mentioned Sean Puchalski, govt vice-president for B.C.-based Corvus Power, which makes rechargeable batteries for marine and maritime functions.
The BMAC says Canada’s focus ought to be in mining, processing, smelting and refining, in addition to some part manufacturing.
“Canada usually lacks metallic refining and chemical processing capability associated to battery grade supplies,” Clear Power Canada notes.
On the mining aspect, there are 5 battery minerals which might be important for lithium-ion batteries: cobalt, graphite, lithium, manganese and nickel. The BMAC notes that “all the main battery minerals are present in Canada; nonetheless, many should not actively produced.”
Japanese Canada is a big producer of nickel. Canada additionally produces some cobalt and graphite and is beginning to see some investments in lithium extraction. As a provider of battery metals and elements, Canada’s benefits embrace geological richness, a longtime mining business and a clear electrical grid. Its drawback is its regulatory and funding local weather.
Getting a brand new mine authorized and in manufacturing is usually a decades-long course of, not simply in Canada, however elsewhere as nicely. The federal and provincial regulatory processes in Canada are seen as significantly sluggish and overly bureaucratic, nonetheless. There are fears that EV adoption may very well be significantly hampered by a scarcity of uncooked supplies.
“Administrative processes, allowing choices, and funding allocations can have lengthy lead occasions, making Canada a tough jurisdiction to develop in,” the Clear Power Canada report notes.
The BMAC urges regulatory streamlining, in addition to tax breaks and different incentives for metallic and mineral exploration.
Whereas lithium might be extracted in hard-rock mining, it will also be extracted from oil and fuel brines, after which processed into battery-grade product. However because the BMAC report factors out, there’s a lack of refining and processing capability in Canada, which might be capital intensive.
“Amenities can price as a lot as C$2 billion, requiring vital funding,” the report notes.
“Some minerals, like lithium, are present in variable or distinctive deposits requiring specialised extraction expertise. Given the nascent state of the business, there stays a scarcity of processing capability for a lot of battery minerals in Canada with many international locations considerably forward.”
One other hole in Canada is a scarcity of refining to make battery-grade nickel-sulphate, Marshall mentioned.
“In 2019, China processed 65% of the world’s nickel, 82% of the world’s cobalt, 93% of worldwide manganese provide, 59% of the world’s lithium and practically all world graphite provide,” the BMAC report factors out.
Due to that monopolization, there’s a now an effort within the U.S. and Europe to “reshore” a few of these industries, in an try to safe provide chains.
Clear Power Canada’s report makes 9 suggestions for a Canadian battery provide chain technique, however finally the primary precedence – past increasing Canada’s personal EV market – ought to be bringing stakeholders collectively to develop a imaginative and prescient, mentioned Clear Power Canada senior coverage adviser Joanna Kyriazis.
“Second, we should be partaking with the U.S. to leverage the big U.S. market and arrange a North American battery alliance that will get investments flowing and transactions going throughout the 2 international locations,” she mentioned. “Canada ought to work arduous to verify we’re carving out alternatives for ourselves past simply being a uncooked supplies provider.”
(This text first appeared in Business in Vancouver)