Critical minerals are the backbone of modern society. They are found in the devices we use every day—smartphones, laptops, electric vehicles—and in essential infrastructure like electricity grids, solar panels and wind turbines. As the global economy shifts towards decarbonization, the demand for these minerals is set to skyrocket, with the market expected to reach $770 billion by 2040 (IEA, 2024).
For Canada, the stakes are high. The country is home to a wealth of critical minerals that are essential for the transition to a green economy. But, as the demand for these resources grows, so does the need for a resilient, self-sufficient supply chain that ensures both domestic and global needs are met.
Ardy Sufi, Vice-President of Business Development, Minerals & Metals at AtkinsRéalis, an engineering and nuclear services firm, emphasizes the critical role that these minerals play in shaping the future: “The way we live, work, and play is all tied to our supply of natural resources, and in particular, to critical minerals.” He stresses that the importance of critical minerals is not just local but global, with countries like the U.S. and Canada both reliant on these resources for their energy transitions.
Defining critical minerals and Canada’s role
Critical minerals are defined by three criteria: they must be essential for the economy, their supply must be vulnerable to disruption, and they must be vital for advancing low-carbon technologies. Canada has identified 31 critical minerals, including lithium, nickel, cobalt, copper and rare earth elements (REEs)—many of which are at risk due to geopolitical instability and supply chain disruptions.
Sufi explains that Canada must act swiftly to secure its position in the global critical minerals market. “We are not self-sufficient, but we are on the path to getting there. What we need to do is integrate all of these processes—from mineral extraction and processing to manufacturing and recycling,” he says.
Canada is already a global mining powerhouse, and its vast mineral resources put the country in an excellent position to meet both its own energy needs and the rising global demand for these minerals. With the right public and private investments, Canada can secure its critical minerals supply chain and continue to be a leader in the global green economy.
Securing Canada’s supply chain
The Canadian federal government has recognized the urgency of this issue and has taken steps to ensure the country has a secure, integrated supply chain for critical minerals. This includes initiatives such as the Critical Minerals Strategy, launched in 2022, which earmarks $4 billion to support mineral exploration, innovation, and investment in Canada’s mining value chain.
Canada’s reputation as a global mining leader and its proximity to key U.S. and European markets make it a critical partner in the race to secure sustainable, ethical supplies of minerals. However, experts caution that the country needs to invest in processing and manufacturing capabilities in addition to extraction. Sufi argues that securing the entire value chain—from mineral extraction to the recycling of end products—will help safeguard Canada’s supply, ensuring that disruptions in the global supply chain don’t lead to domestic shortages.
The Canadian government has supported this vision with significant funding. More than $3 billion in grants and incentives have been allocated for critical mineral projects through various programs, including the Strategic Innovation Fund (SIF) and the Critical Minerals Infrastructure Fund (CMIF). These investments are designed to help domestic miners and manufacturers ramp up production and processing to meet future demand.
Energy transition and critical minerals
The global push to decarbonize economies is driving unprecedented demand for critical minerals. Electric vehicles (EVs), solar energy, and wind power all rely on materials like lithium, copper, cobalt and rare earth elements. For instance, lithium is essential for EV batteries, copper is used for electrical wiring in Canada’s electricity grid, and indium and tellurium are needed for solar panels.
As Sufi notes, the exploration of critical minerals is the first step in ensuring Canada can meet this growing demand. “Canada’s junior mining sector, which does much of the exploration of critical minerals, needs support to scale up,” he says. “If there’s a disruption in the supply chain and we don’t have enough material, we basically have to shut down our manufacturing.”
To help support this crucial step, the government has introduced the Critical Mineral Exploration Tax Credit (CMETC), which provides financial relief to miners, helping them cover costs related to drilling, rock and soil sampling, and other exploration activities.
The need for critical minerals is particularly acute when considering the future shortfall in supplies. According to the International Energy Agency’s (IEA) Global Critical Minerals 2024 Outlook, there is a significant gap between the projected demand for copper and lithium and the supply expected from announced mining projects. The IEA estimates that mine supply from existing and planned projects will meet only 70% of copper demand and 50% of lithium demand by 2030.
Job creation and economic growth
The potential economic benefits of securing a robust critical minerals supply chain are enormous. A 2022 report by Clean Energy Canada projected that a national battery supply chain alone could contribute between $5.7 billion and $24 billion to Canada’s GDP by 2030 and support up to 81,000 direct jobs and 333,000 indirect jobs. Additionally, investment in mining and processing facilities will create job opportunities across the country, from urban centers to remote and Indigenous communities.
As Sufi points out, private and public investment is critical to ensuring that Canada can meet its energy transition goals. “We need to invest now,” he says. “Any disruption to the supply chain will create a ripple effect, impacting our entire labor market and becoming a serious national defense issue.”
Recycling and the circular economy
In addition to securing a steady supply of mined minerals, Canada’s green transition depends on the development of a circular economy. As the demand for critical minerals continues to grow, recycling these materials will become increasingly important.
“We cannot mine all the lithium available in the Earth’s crust to meet demand,” says Sufi. “Even if we did, it still wouldn’t be enough.” Although full-scale recycling technologies for critical minerals are still in development, Canadian companies like Cyclic Materials in Kingston, Ontario, are already making strides in the field. The company recently received equity investment from Microsoft’s Climate Innovation Fund, a sign that innovations in mineral recycling are gaining traction.
AtkinsRéalis, with its extensive experience across the entire critical minerals value chain, is well-positioned to help connect miners, manufacturers, and recyclers. “We are the glue,” Sufi says. “We bring the right people, skills, and expertise to every project.”
Conclusion
As the demand for critical minerals accelerates, Canada’s strategy for securing a resilient, integrated supply chain will play a pivotal role in the country’s economic future and its energy transition. By investing in exploration, extraction, processing, and recycling, Canada can solidify its position as a leader in the global clean energy economy, ensuring both domestic and international demand are met in an environmentally sustainable way.
The opportunity is clear: act now, and Canada will not only secure its own green future but will help drive the global transition to a low-carbon economy.
