Mining News

Canada wants 20% of global rare earth market supply but mining policies may hinder development

Posted by Alana Wilson on 1/17/2014 3:37:39 PM

By Alana Wilson

The Canadian government has plans to help support the Canadian mining industry in securing a greater proportion of the global rare earth elements (REE) market, reports Frick Els.

Canada's parliament recently launched a new study of the country's REE industry while a new industry group called Canadian Rare Earth Elements Network, established in cooperation with Natural Resources Canada, is working to have government to set aside funding for research and development in the 2014 federal budget:

"Canada is poised to capitalize on extracting rare earth elements, say briefing notes prepared for Natural Resources Minister Joe Oliver as part of last summer’s cabinet shuffle.

“Rare earth elements (REE) have been categorized by the government as being critical to Canada’s economy,” say the briefing notes, titled “Secret” and obtained by Postmedia News under access to information legislation."

New global suppliers of rare earth elements would be welcome. Although they are not technically rare (in the earth’s crust), their extraction is difficult and until recently China controlled over 90% of the world REE supply. They have also used export restrictions and quotas, affecting the ability of consumers globally to access these elements used in medical imaging, smart phones, solar panels, wind turbines, and a range of high tech, environmental and military applications.

While research and development support may be useful, better mining policies could go further to encourage the exploration and development of the industry domestically. Canada is estimated to have 56 percent of the REE deposits outside of China. Exploration and discovery of such deposits will rely on access to large tracts of lands since deposits that are concentrated and economically feasible to mine are rare. This process is made more difficult by the continued removal of land from exploration and mining activities in many provinces. According to the 2012/2013 Survey of Mining Companies, uncertainty concerning which areas will be protected as parks, wilderness, or archeological sites is a deterrent to investment in many Canadian jurisdictions. British Columbia, Manitoba, and the Northwest Territories have the highest ratings for investment strongly deterred or respondents reporting that they would not pursue investment as a result of this uncertainty.

Also problematic are bans on exploration and mining of uranium. Earlier this year, Quebec joined Nova Scotia and British Columbia in banning uranium mining in their province, although the ban is currently ‘temporary’. REE’s are often found together, making them difficult to separate. They also tend to be found in the same deposits as thorium or uranium, meaning that these bans are likely to discourage exploration companies from investing in the discovery of new deposits in these provinces.

In fact, Greenland lifted its ban on uranium mining last October to facilitate development of its own rare earth element industry. If Canada wants to achieve its goal of producing these elements, perhaps it should start by encouraging provinces to develop mining policies that protect the environment while also permitting the exploration and mining of these valuable elements.

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