Global demand for critical minerals is increasing at a rapid pace, fueled by multiple factors including economic growth, the need for cleaner technologies and the NATO target of five per cent of GDP for annual defence spending, which in Canada is to be met in part by development of critical mineral resources.

It won’t be easy to meet this demand with traditional industry approaches, which are limited in what they can achieve. Instead, the federal government should encourage a broader range of private sector options, backed by a better-informed public, in the development of Canadian sources of metals.

The recent G7 communiqué on critical minerals lists partnerships as a priority. This aligns with our contention that participation in the metals supply by an expanded number of parties, using a variety of less-intensive extraction techniques, is essential to meet demand.

Canada is familiar with “company-induced” models of participation in mining projects designed to engage a local community to obtain a “social license to operate”— their acceptance of a project. Experience in Canada and around the world provides examples of the many difficulties with such models. But more importantly, the focus of the participation is typically one mineral deposit when broader forms are needed.

Demand for metals for infrastructure, construction, machinery and consumer electronics is growing rapidly and increases with per capita income. In Canada that number has increased by about 120 per cent since the year 2000.

The shift to clean technologies that do not emit greenhouse gases, such as electric cars, wind and solar power, leads to additional demand for metals.

Copper is a good indicator of this additional demand because it is used in clean technologies. In 2024, annual global production was about 23 million tonnes, but by 2040 projected global demand will be 34 million tonnes, of which about 12 million tonnes will be used in clean technologies.

There is little that can be done to curb demand for metals but there are many levers available to increase supply.

Broadening participation to meet surging mineral demand

This requires understanding what we call the metal supply assemblage – the collection of mining companies, metal refiners, suppliers, manufacturers, consumers, recyclers, financial and government institutions, and communities that each contribute to the production of metals.

The assemblage is global, but there are national versions. Our concern is how the Canadian assemblage can be creatively reassembled to allow our country to unlock its mineral wealth, particularly its wealth of critical minerals.

The dominant model of minerals extraction is one of scale: massive investment, equipment, infrastructure and mines. It is taken for granted that only those mining companies currently within the industry will build and operate these mines.

While this model offers efficiency and large returns for investors, it works only when deposits are also large. Smaller deposits and other sources of metal are uneconomic under this model.

As a result, we have failed to consider the fact that metals, including critical metals, are present in one or more of small mines, current mine waste streams, historical mine waste deposits and recycled metal waste.

Smaller, flexible operations as a path to innovation

The federal government needs to provide opportunities to identify and exploit more of these occurrences. Technology start-ups provide a model: less capital, smaller and mobile equipment, modular infrastructure. Technology start-ups have shown that innovation is unleashed in the absence of the imperative to increase shareholder profit.

A recent report by the Canadian Climate Institute suggests that $30 billion of investment will be required over the next 15 years to fully realize the potential of the country’s mineral resources. This means finding and developing mines, a process that can take several years. Time is one constraint. So is the necessary infrastructure – roads, power and water – often in inhospitable places. Professional mine designers and mine operators are also scarce.

But there are other significant constraints on mine development and these also increase with scale. Possibly the most significant is the combination of physical, environmental and socioeconomic footprints caused by mining and their often-disruptive effect on nearby communities.

The current business model and organization of the mineral resources industry has difficulty tackling these financial and footprint issues.

We contend that the entrepreneurial spirit of the general public, with support and incentives from government and industry, can be mobilized to help implement a wide variety of different business models to mitigate or circumvent these issues, especially if the public is informed, armed with knowledge and understanding of the industry.

A critical look at critical minerals

Is Canada’s critical minerals strategy a green shift or greenwashing?

For critical minerals, it’s better to talk about SDGs than ESG

For example, smaller mining operations would have the flexibility to adapt to changes in the metals markets as well as variations in the distribution of metals in the orebody at one or more operations.

Companies that extract metals using advanced chemical or biological technologies from sources such as mine waste, metal scrap or industrial waste would appeal to some groups of investors.

Streaming companies, which provide capital to mining companies in return for supply of a particular metal from a polymetallic source over some period of time, could lead the development of otherwise idle mineral resources.

Another possibility is public-private partnerships where a public entity such as a provincial government signs an agreement with a consortium of mining companies and suppliers that design, build and operate a mineral or metal production operation or the associated infrastructure in return for a portion of the revenue over a period of time.

There are many variations on these themes, but fundamentally each involve changing the boundaries between companies, between companies and the market, and between the industry and the public.

Government action to build metals literacy and spur investment

To facilitate this kind of participation, the federal government must do two things.

First, it needs to provide start-up capital, as it has with its Indigenous Natural Resource Partnerships program, to support community-driven, rather than company-driven, models of participation. Participation, including innovations in metal supply, novel extraction technologies and a wide variety of partnerships, can thus develop without being constrained by company priorities.

Second, it needs to launch a public campaign to promote metals and minerals literacy, an awareness of metals in the lives of Canadians and an extension of Prime Minister Mark Carney’s “elbows-up” stance on building a stronger economy that is less dependent on the United States and helping to build the grassroots “Buy Canadian” movement.

Such participation creates opportunities for technological as well as organizational innovation. It also leads to a more robust social licence.

Most importantly, it would allow access to a greater volume of our mineral resources, particularly those critical for the defence and economic security of Canada and our allies.