Critical mineral reserves present Canada with a half-a-trillion-dollar opportunity
Critical mineral reserves present Canada with a half-a-trillion-dollar opportunity

Economists predict Canada could boost its GDP by over $500 billion if it digs into its critical mineral reserves. 

In a new report, TD analysts say the country is on the brink of an economic windfall, poised to harness an abundant critical mineral wealth throughout Canada. 

Critical minerals are essential for developing clean technologies, which are pivotal in reducing global greenhouse gas emissions. With rich reserves of these minerals, Canada could see at least $300 billion from just six cobalt, lithium, copper, graphite, nickel, and rare earths. 

The report does not consider other sought-after critical minerals like silicon, platinum, aluminum and others, meaning the likely valuation of Canada’s supply is much larger than reported. 

According to TD Canada economists Francis Fong, Likeleli Seitlheko, and Mekdes Gebreselassie, developing these resources can contribute over $500 billion to the nation’s GDP over the mines’ lifespan.

“Canada has a once-in-a-generation opportunity to play a key role in supplying the global economy given significant reserves of almost all minerals that are identified as critical to the clean energy transition and economic security in provincial, territorial and federal Critical Minerals Strategy documents,” wrote the report’s authors. 

The proposed projects for the six minerals alone could lead to up to $80 billion in capital expenditures and boost GDP by $63 billion once construction begins, followed by $460 billion over the mines’ production lifespans.

This development phase could create approximately 95,000 full-time jobs and contribute $12 billion in tax revenue.

Analysts wrote that realizing this economic potential hinges on establishing partnerships and collaboration with Indigenous communities, on whose lands many of these mineral deposits are located.

Emerging models of partnership, which include equity stakes for Indigenous communities could lead to successful mineral development projects. 

The expanding use of renewable energy sources and electric cars is boosting the need for minerals like copper, cobalt, lithium, and nickel.

Since green technologies require more minerals than fossil fuels, this demand is likely to persist. For example, electric vehicles need six times the minerals per unit compared to conventional vehicles, while solar and wind power require much more minerals when compared to natural gas power.

If the Paris Agreement targets are met, global demand could grow fivefold by 2050. Even with a more gradual transition, industry growth could explode by double in the middle of the century.

Recent policy shifts by the US and Chinese governments have also created further opportunities for Canada to exploit its favourable position in the emerging market. 

Last month, US President Joe Biden introduced a 25% tariff on natural graphite beginning in 2026 and a 27% tariff on synthetic graphite beginning this month. The moves are expected to shift US purchases towards Canadian producers and away from Chinese critical mineral providers, who have long dominated the market.

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