CRITICAL MINERALSAustralia Should Learn from Canada and Take a Truly Global Approach to Critical Minerals

By Ian Satchwell

Canada and Australia are key players in the global supply chain for critical minerals. Simultaneously the top two nations for receiving minerals investment and for providing minerals investment, they are perfectly placed to use critical minerals to facilitate the global energy transition, foster innovation and build their security capabilities.

Accordingly, both have released critical minerals strategies in the past year. They have also concluded agreements with each other and other like-minded jurisdictions, including the US, EU and UK, to cooperate in the development of robust critical-mineral supply chains.

Australia’s strategy, released in June 2023, is similar in most respects to its Canadian counterpart, released in December 2022.

Both adopt supply-chain approaches, but Canberra’s strategy is focused exclusively on Australia providing upstream components like exploration, drilling and extraction. Only the discussion of downstream elements, such as processing, is partner oriented.

Ottawa, on the other hand, takes a global view of the upstream and downstream components of supply chains, and considers Canada’s role throughout. It wants to develop supply chains from within Canada that connect to friendly economies, but also support sustainable supply chains that originate in other nations.

The Canadian strategy is consistent with the government’s longstanding view of the mining industry comprising activity within Canada’s borders as well as that of Canadian companies abroad.

The S&P Global database reveals that Canada ranks first in the world in exploration investment for all minerals, and 57% of that investment in 2022 ($7.9 billion) was spent outside Canada. This gives Canada a huge influence over the discovery and development of critical minerals worldwide. Its 2019 minerals and metals plan acknowledges this by naming ‘global leadership’ as one of its six strategic directions, and both it and the 2022 critical minerals strategy emphasize Canadian mining as leading sustainable development in minerals overseas, notably in developing economies.

Despite being the second largest global investor in exploration, Australia has taken an inward-looking approach. This is at odds with the global profile of the Australian minerals sector, which has large investments and extensive activities on every inhabited continent.

Of the 1,151 Australian exploration and mining companies identified by S&P Global, 856 operate in Australia and 428 operate in other parts of the world. Some operate in both. In 2022, more than a third of their combined $4.7 billion exploration budgets was spent outside Australia.