Ottawa is relying on copper to be a nation builder — and Canada has to play catch-up

Ottawa’s checklist of fast-tracked “nation-building” tasks contains the event of two copper mines — to supply one of many world’s most vital pure assets as world demand soars and provide challenges persist. 

Such tasks “must strengthen Canada’s autonomy, our resilience and our security. It must have clear benefits for Canadians,” stated Prime Minister Mark Carney through the Thursday announcement.

Enter copper, the world’s third-most broadly used steel and a conduit for all issues electrical. The federal authorities is recommending regulatory approval for the McIlvenna Bay Foran Copper Mine Mission in Saskatchewan, and an growth of the Pink Chris Mine in northwestern B.C.

The important mineral is used to construct electrical autos and different inexperienced vitality merchandise. However demand is skyrocketing amid the worldwide increase of information centres, which home the {hardware} that powers synthetic intelligence.

Canada is “a major mining power, and copper is one of the most important natural resources of this century,” stated Vince Beiser, the Vancouver-based writer of Energy Steel: The Race for the Sources That Will Form the Future.

“All of our digital gadgets need electricity. How does electricity travel? How does it get from the dam or the solar power farm to your home? It travels on copper,” he stated.

A small piece of the pie

The steel is without doubt one of the chess items caught within the crossfire of the U.S.-China commerce conflict. Whereas copper costs have been rising during the last a number of years, they spiked and stayed elevated earlier this summer season when the Trump administration threatened a tariff on uncooked copper.

Ultimately, it as an alternative imposed a 50 per cent levy on semi-finished copper merchandise — sparing international locations like Canada from the worst of the injury, however hitting Chinese language refiners that account for roughly half of the world’s copper-smelting capability.

A minimum of one federal official has pointed to Chinese language dominance of the copper market as motive why Ottawa is making an attempt to speed up its steel manufacturing.

Pure Sources Minister Tim Hodgson says Canada has a job to play in copper manufacturing “as a democratic country,” and accuses Beijing of manipulating copper costs.

“We have an opportunity to take the cards out of autocrats’ hands and put those cards in Canada’s hand,” Hodgson stated Thursday on CBC Radio, arguing that “others” are utilizing copper as a “tool of coercion.”

Teck’s Highland Valley copper mine is pictured within the B.C. Inside on March 26, 2017. (Jonathan Hayward/The Canadian Press)

Although China has a “stranglehold” on rare-earth minerals, it doesn’t have “quite as commanding a position” with copper, regardless of its energy in processing and refining, in response to Beiser.

“This is another reason why I think it does make sense for Canada to try to strengthen their hand in this particular realm because, hey, we’ve got copper, we’ve got copper mines. We also have copper refineries,” he stated.

Provide challenges

Nonetheless, Canada is a comparatively small piece of the worldwide copper puzzle, making up simply two per cent of world manufacturing, in response to Dennis da Silva, a senior portfolio supervisor at Middlefield who analyzes the metals and mining sectors. 

“Globally speaking, most of the growth that could come in the copper space, in fact, is outside of Canada,” stated da Silva, including that the federal authorities has focused “perhaps the only relevant projects for Canada that could be built.”

Just lately, a number of Canadian mining firm have prioritized copper over different commodities. Barrick Mining, previously often known as Barrick Gold, lately offered its final gold mine in Canada for $1.1 billion because it shifts its focus to its copper portfolio.

That push was led by Barrick CEO Mark Bristow, who projected earlier this 12 months that about 30 per cent of the corporate’s manufacturing will probably be copper — roughly equal to the rise it expects for its gold portfolio.

The deal, topic to shareholder and regulatory approval, can be one of many greatest mining mergers within the sector’s historical past, and in response to da Silva, “highlights the dearth of shovel-ready projects” within the supply-challenged copper sector.

Manufacturing has declined ‘significantly’

Copper manufacturing in Canada has declined “quite significantly” over the previous few many years, in response to Photinie Koutsavlis, vice-president of financial affairs and local weather change on the Mining Affiliation of Canada.

Between 2014 and 2023, it dropped by greater than 22 per cent, in response to information from Pure Sources Canada. Over the identical interval, copper exports declined by roughly 24 per cent, says Statistics Canada.

“We’ve definitely lost our footing in our global rankings on copper,” Koutsavlis stated. “Hopefully these projects are a good start at reversing that trend.”

The U.S. makes up about 5 per cent of world copper manufacturing, whereas Chile is the world’s greatest producer at 30 per cent. Canada might doubtlessly make up seven to eight per cent of manufacturing over the subsequent 20 years, in response to da Silva.

However Canada would have “needed to kind of start putting these things on the drawing board probably five years ago in order to properly match the expectations for demand,” he stated.

“You can imagine how long it takes to find it, prove it out, justify the economics, and then ultimately build it, turn on the switch and bring it into production.”

Copper is forged in a furnace on the Canadian Copper Refinery, a copper and treasured steel refinery in Montreal, on July 25. (Christinne Muschi/The Canadian Press)