Western Canada holds potential to become a ‘critical minerals processing behemoth,’ expert says

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But he also said the reports can serve as a roadmap for investors to explain how one project may be synergistic with others.

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“There’s a whole value chain that can be developed,” he said. “We’re trying to say, ‘This is where we can start and where there are going to be impacts if we do make some of these investments.'”

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But trying to revive investments in the EV supply chain may be difficult right now. Canadian EV sales declined 23 per cent in the first quarter to 37,229 new registrations, a drop that has been attributed to several factors, including the end of government rebates that lowered the cost of a new EV and economic uncertainty brought on by tariffs implemented by the United States.

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In the U.S. — which had been considered the main market for EVs produced in Canada — President Donald Trump has erected trade barriers to impede the flow of foreign-made vehicles and moved to roll back many of the pro-EV and renewable energy policies enacted by the Joe Biden administration, which will likely further delay EV adoption.

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“The rest of the world is still going to electrify its transportation networks at the same rate, if not faster, and if the U.S. basically decides that it doesn’t want those assets in the U.S. anymore, then that creates an opportunity for us,” Allan said.

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Another motivating factor to produce the reports is that the federal government has committed tens of billions of dollars to building out an EV supply chain, mainly in Ontario, the traditional epicentre of the country’s auto sector, but to a lesser extent in Quebec, too.

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Some of those facilities, such as a planned battery plant in Quebec, have been scrapped, while others, including Honda Motor Co. Ltd.’s planned $15-billion EV assembly and battery cell manufacturing complex, were recently pushed back two years because of current market conditions.

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Allan, who researches Canadian industrial strategy and helped the reports’ lead author, Sosthène Ung, a chemist by training, has long advocated that midstream-processing facilities for metals create the best economic opportunities.

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But the midstream is complex, he said. It is where an intermediate metal is produced, such as a copper matte, blister, cathode or some other form, and requires understanding esoteric chemistry, an unlikely area of expertise for traditional auto-sector analysts.

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“The midstream strategy is critical,” Allan said. “How you design the middle is key because it can determine whether you create a domestic ecosystem where innovation can occur, where there are cost efficiencies — so many important things.”

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The reports do not recommend the government pursue specific policies, such as direct investment or below-market rate loans, to enable the development of projects. Instead, it highlights gaps in the existing supply chain and emerging markets.

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For example, rare earths, a group of 17 elements, can be converted into powerful magnets that are increasingly used to make motors in vehicles, electric or otherwise, as well as in numerous other technologies, including many military applications.

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There are rare earth exploration projects in B.C., Saskatchewan and the Northwest Territories, but Allan said such projects are typically smaller in size, and it remains a field in which China dominates and research in the West has not kept up.

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“The good news is you can spend very little money to take a crack at it, and if you hit the lottery, then you get a big payout,” he said. “But you don’t need to put a ton of money into it because you’re not dealing with a high volume of material being moved.”

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