Like anyone under the age of 40 trying to buy a house, Canadian miners will need a little bit of financial help if they want to set themselves up for the future.
What happened: As prices for critical minerals like lithium and nickel plummet, miners are warning that if the federal government doesn’t step up to help fund new projects, Canada could fall behind in production to rivals like China for good, per The Globe and Mail.
- Both lithium and nickel are key minerals for manufacturing electric vehicle batteries, an industry Canada has invested well over $30 billion by way of federal and provincial subsidies for automakers.
Why it’s happening: Amid worsening economic conditions in China, Chinese companies aren’t buying as many minerals. That inventory stockpile is being sold off at a bargain, which has driven down lithium and nickel prices by 80% and 50% in just over a year, respectively.
- Plus, demand for EVs has been a lot slower than expected in some Western countries, which has stalled the need for many of the minerals needed to make batteries.
Why it matters: Demand for the minerals may be slower at the moment, but given that new mines often take over a decade to build, experts say a stall in investment now will put Canada at a big disadvantage down the road, especially as the EV transition ramps up.
Bottom line: Canada secured the spot as the most promising country for EV battery production, but without the mining infrastructure to turn its raw materials into a sellable commodity at the same pace as competitors, those hopes could slip away fast.—LA