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Click here to see other videos from our team. If you refresh your browser, or the hidden clause in the U.S. EV bill that could benefit Canada Along with reducing the heartburn from Canada's EV manufacturing sector, the deal reached last week by U.S. senators Chuck Schumer and Joe Manchin included a $3,750 federally funded incentive for vehicles manufactured using critical minerals extracted or processed by U.S. free-trade agreement partners or recycled in North America. The percentage of these geographically extracted critical minerals is going up over time, starting at 40 per cent and rising to 50 per cent in 2024, going up to 80 per cent by the end of 2026. It could be a boon for Canadian miners given their close proximity to U.S. automakers. Can they meet such aggressive timelines?
Canada is one of only 20 countries with a free-trade agreement, and is one of only 20 countries with a U.S. free-trade agreement. If Canada gets all of its mines in development into production, it could gain 35 per cent of the North American nickel and graphite markets in 2030, according to a report released last month by the Transition Accelerator. Canada could hit 12.5 per cent market share of lithium, the other key mineral in the EV supply chain, but that would be a stretch goal, according to the report. Bentley Allan, author of the report said that to speed that timeline up, you need investment, and you need the government to deliver on that strategy. It takes more than 16 years for a mine to have its first production, according to the IEA, and the proposed U.S. incentive program begins next year.
Allan told The Logic that Lithium, phosphate and iron can be readily supplied by North America or U.S. free-trade partners. Nickel, graphite and probably cobalt would need to be supplemented by others. He said it was very unlikely that we would not be able to do 100 per cent of those, and major nickel suppliers like Indonesia and Russia are not U.S. free-trade partners. Much of Canada's nickel goes toward stainless steel. Canada needs to invest in chemical processing faster, or we're in trouble," Allan said. David Billedeau, senior director at the Canadian Chamber of Commerce, said that the government risks being left in the dust unless it expedites mining-project approval while ensuring environmental protections, approval of Indigenous communities, and attracting new venture capital. He said that mining operations need to invest in infrastructure to get up to scale quickly, so they can bring costs down over time.
Ian Lange, a former member of the White House Council of Economic Advisers and director at the Colorado School of Mines'Mineral-Economists program, said little is likely to change in the long-term partnership between the U.S. and Canada on critical minerals, and that the language is more likely an olive branch to Democrats who oppose new domestic mining projects and would prefer to rely on allies. There is going to be a market for these things if you get these things up and running, said Lange. This is only more helpful if Canada is closer to ESG-friendly than the Democratic Republic of the Congo in all senses. This section is powered by The Logic.