Simultaneously, the energy transition generates demand for various commodities and prompts “a huge opportunity and requirement for economic development,” he says. Countries are pursuing domestic development and trying to ensure some level of domestic ownership of these assets to maximize the economic benefits flowing from the transition.
Pickersgill says that, historically, resource nationalism in the mining sector has involved countries expropriating assets, refusing to grant authorizations to foreigners to develop projects, or the indirect nationalization of assets through significant tax-regime or royalty changes. Now, resource nationalism in the form of industrial policy is prevelant, and includes Canada’s Critical Minerals Strategy, he says.
Last December, Ottawa announced the strategy, which is aimed at spurring economic growth and addressing climate change. Among the feds’ focus areas in achieving their goals are “accelerating project development” and “driving research, innovation, and exploration.”
“We have this opportunity with critical minerals all over the country,” says Pickersgill. “We have this maybe once-in-a-generation opportunity to develop a whole series of assets.” He says he and his firm have a favourable view of Canada’s Critical Minerals Strategy, which, in addition to financial incentives, includes direct investment in the critical mineral industries.
Canada’s strategy includes a fiscal program involving tax breaks, tax incentives, and other financial commitments to help support development. Canada is also toughening its stance on foreign investment in critical minerals by state-owned companies. Last November, Innovation Science and Economic Development Canada ordered three Chinese companies to divest their stake in Canadian critical minerals projects, citing national security.