Ontario aims to boost EV industry as it announces its first critical minerals strategy  

As part of its five-year critical minerals strategy announced today, Ontario will invest $24 million over three years in its Junior Exploration Program, half of which will be invested for a critical minerals funding stream, and $5 million for a critical minerals innovation fund. 

The strategy aims to better connect mines in the north to the manufacturing sector in the south, specifically to Ontario-based electric vehicle and battery manufacturers. It will also look to tap into the EV, batteries, telecommunication and national defence markets and position the province as a “global leader in supplying the critical minerals.”  

“The Critical Minerals Strategy is our government’s blueprint to connect industries, resources and workers… as we build up home-grown supply chains,” Ontario Premier Doug Ford said in a press release. “Doing so has never been more important as we secure game-changing investments in our auto sector to build the electric vehicles and batteries of the future.”  

Ontario has identified 33 critical minerals, including nickel, cobalt, lithium, and rare earth elements. It produced about $3.5 billion worth of critical minerals in 2020 with a mining sector that employs about 75,000 people. 

The strategy will focus on supporting critical minerals exploration, enhancing geoscience information, improving the regulatory framework, investing in research, building economic development opportunities with Indigenous partners and growing labour supply for the mining sector, the province said in a press release.  

Support provided under the plan include: introducing a modernized digital platform for mineral exploration companies to access Ontario’s critical minerals geoscience information; reassessing historical geoscience information to better identify critical minerals deposits; and undertaking new initiatives that target underexplored areas in the province. 

The government is also committed to investing $250,000 to support the development of two new battery production lines at Electra Battery Materials’ (TSXV: ELBM; OTC: ELBMF) future Battery Material Park near Cobalt, Ont.  It also aims to develop a regulatory framework for the recovery of minerals from mine tailings and waste.  

To attract more workers to the sector, the province will support industry efforts to train underrepresented workers, such as newcomers to Canada and women.  

The strategy will help Ontario stake “claim to the emerging North American EV battery industry,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade.  

Chris Hodgson, president of the Ontario Mining Association said in a press release that the strategy would localize the supply chain and reduce geopolitical risk for Ontario, while adding that the province’s metals and minerals were “essential for low-carbon technologies and to the green economy.”  

Analysts have described the strategy as a move in the right direction but believe that the province should have unveiled the plan a lot earlier. Similar plans unveiled in Quebec and Australia at an earlier stage have resulted in the regions becoming more attractive to global companies and moving ahead in terms of competition.

‘Follow the others’ strategy

“It is a bit of a “follow the others” strategy that was long overdue. Many regions and countries put forward their strategic minerals strategy a long time ago — still, it was needed,” Jon Wijnicki, partner at Ernst & Young told The Northern Miner.

Quebec, for instance, is establishing Becancour as a battery metals hub, including a number of projects that are already at the feasibility stage when compared to the early-stage projects in Ontario.

Economist Patricia Mohr, who was vice-president of Scotiabank and is now an independent analyst and founder of the publication Critical Metals for a Sustainable World, believes the province should have focused more on getting new mines into development and not just early-stage exploration projects.

“We have a lot of exploration activity across Canada, but we are at the point when we need to get some of the deposits into actual production,” said Mohr.

Wijnicki echoed a similar sentiment and said that priority should be given to advanced projects that will be able to benefit from the huge demand for battery metals that is likely to remain for the next three to seven years. 

“These high prices will either slow down EV adoption or create market distortions that may over supply the market for a long time. Many battery metal projects in Ontario are too early stage to benefit or don’t really need help and might just get built in time for an oversupplied market,” he said. 

Ontario currently has 323 active mineral exploration projects, of which approximately 60% are exploring for gold and 23 are advanced mineral projects according to a report published by the Ontario Mining Association.

In 2020, the province’s sector produced $10.7 billion worth of minerals, which accounted for 24% of Canada’s total production value. Out of this, 56% was precious metals production and 42% base metals. About 50% of the active mines in Ontario are gold mines, the report added.