Alaska senator reignites mining dispute that could complicate Canada’s critical minerals strategy

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The Galore Creek Project, a major copper project important to electricity supply chains, is moving toward a formal investment decision, while the Red Chris mine is undergoing a major underground expansion after being designated a nation-building project by the federal government.

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A senior mining executive, who asked not to be named, at one of the companies operating in the region said investor sentiment is sensitive to political pressures even if no formal policy changes have been made.

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“Investors don’t like uncertainty,” he said.

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There is no evidence yet of investors withdrawing or financing being affected, he said, but the risk lies in adding further layers to the permitting process rather than outright opposition.

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“You have additional parties at the table demanding change,” he said. “It just expands the opportunity for something to slow or stop a project.”

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John Steen, director of the Bradshaw Research Initiative in Minerals and Mining at the University of British Columbia in Vancouver, said there isn’t any evidence that current mining operations are contaminating Alaska’s rivers.

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“That claim is completely baseless,” he said. “It’s not based in science. It’s a lot of noise at the moment.”

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Steen said the dispute is less about a response to new environmental data and more about political signalling.

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“We’re in weird times,” he said, pointing to uncertain trade relations and negotiations under the Canada–U.S.–Mexico Agreement. “Things can become issues unexpectedly.”

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At the same time, Canada and the U.S. are deepening co-operation on minerals vital to defence and the high-tech industry. For example, earlier this year, the joint Critical Minerals Production Alliance said it is backing about $18.5 billion in investment commitments for Canadian mining projects.

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Both governments have committed billions of dollars for critical minerals development. Ottawa has set aside nearly $4 billion to its comprehensive Critical Minerals Strategy and is officially launching its $2-billion Critical Minerals Sovereign Fund this spring.

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The fund marks a shift in Canadian policy, allowing the federal government to take direct equity stakes in companies and provide loan guarantees for high-priority projects deemed essential to national and allied security.

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The U.S. has invested more than US$60 million in direct defence-related co-investment for Canadian critical minerals projects in recent years. This includes US$20 million for Toronto-based Electra Battery Materials Corp. to onshore cobalt refining, US$15.8 million for Vancouver-based Fireweed Metals Corp. in the Yukon and US$8.35 million for Lomiko Metals Inc. in Quebec.

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Steen said Canada should “play a straight bat” in response to U.S. political pressure, which is often inconsistent and shifting, and that Ottawa appears to recognize that responding to every statement would be counterproductive.

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“The industry’s in good shape,” he said. “That’s the line to take. And the industry should be allowed to do what it is doing and continue in the direction it is going.”

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Nevertheless, three river systems — the Taku, Stikine and Unuk — have been sticking points for the U.S. because they flow from B.C. into Alaska and concerns are often reactivated by new development proposals or politics.

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Sullivan is also facing a closely watched re-election campaign in this fall’s U.S. midterm election, which could be behind his continuing pressure even though he is at odds with his state’s regulators.