The Mining Association of Canada’s President and CEO Pierre Gratton discusses his Vancouver Board of Trade presentation addressing the question, “How can we build more mines faster?
He covers several key issues including, the need for critical minerals with the global push for EV’s, Canada’s Mineral Strategy, exploration, tax incentives, declining mineral reserves and mining exports.
For more events in the Vancouver Business community, check out The Vancouver Board of Trade.
Tax Credits and Government Support
- There is an important tax credit in Parliament that could incentivize investment in critical mineral projects, but it has not yet been tabled.
- The Canadian government’s focus has been more on downstream industries, which has delayed progress in mining, despite the rising need for minerals essential to industries like electric vehicle (EV) manufacturing.
- Permitting processes in Canada are slow, and without more incentives, mining companies are struggling to advance key projects.
The Need for More Discoveries
- To meet the growing demand for minerals, more mineral discoveries are needed, but changes to the capital gains tax have unintentionally undermined the Mineral Exploration Tax Credit, which funds junior mining exploration.
- Several mining projects, including nickel and copper, are stalled due to delays in tax incentives and government action.
Critical Minerals Strategy
- Canada’s Critical Minerals Strategy is comprehensive but has stalled in some key areas, especially regarding eligibility for tax credits.
- A 90 per cent threshold for critical minerals in products limits the incentive for some mines, particularly copper, that don’t meet that threshold due to mixed ores.
- The government has promised to lower the threshold, but until this is done, projects will continue to face challenges.
Challenges with Declining Reserves
- Canada’s mining industry is facing a decline in reserves, particularly for base metals, which poses risks to smelting operations and overall production.
- However, there is potential to restore production through brownfield projects and new developments, such as in Sudbury and British Columbia.
- The Ring of Fire, a significant resource area in Ontario, could also help address this deficit if its projects progress.
Exploration and Investment
- Exploration spending is up, especially in base and precious metals, and the increase in investment is expected to lead to more discoveries.
- Despite challenges, there is optimism that significant new discoveries will be made, as seen in the past with major finds.
Export and Global Competitive
- Canada remains strong in mining exports, especially with higher commodity prices. The country is also seeing growing interest in lithium production, with major players like Rio Tinto investing in Canadian lithium projects.
- The potential for Canada to become a global leader in lithium production is growing, and this shift will add to the country’s competitiveness.
Advice for Investors
- Investors should closely monitor the progress of tax credits and government measures related to critical minerals. While the delay is frustrating, there is bipartisan support for these initiatives, which could make Canada much more attractive to investors once they are in place.
- Companies are waiting for these measures to move forward, and investors should consider the long-term potential of Canada’s mining sector once these issues are resolved.
Gratton is encouraged when it comes to the lithium space, noting the transition from no lithium production to Rio Tinto, one of the largest multinationals in the world, is looking to acquire projects in Quebec. “Getting into the lithium business in Canada is great news for us.” Gratton states and adds, “We have more lithium potential across the country to have one of the world’s, powerhouse mining.”
To engage with other Vancouver business events, including an address by BOC Governor Tiff Macklem, check out Vancouver Board of Trade.
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The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
Be sure to stay up to date on all the latest stock market news at Stockhouse.com.
Join the discussion: Find out what everybody’s saying about uranium, oil and gas, precious metal stocks and more by checking out Stockhouse’s stock forums and message boards.
The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.