AME BC's Todd Stone on mining policy, Roundup conference

Key Concepts

• Geopolitical Shifts in Metals Markets: China is consolidating control over critical mineral supply chains, utilizing strategies like centralized purchasing (CMRG) and overseas investment, potentially shifting transactions away from USD.
• Critical Mineral Supply Chain Diversification: The US and other nations are actively seeking to reduce reliance on China for critical minerals through stockpiling, investment, and policy changes.
• Policy Barriers to Resource Development in Canada: Outdated legislation and complex permitting processes in British Columbia are hindering mineral exploration and development.
• AMEBC’s Advocacy Role: The Association for Mineral Exploration BC (AMEBC) is proactively engaging with governments to address policy challenges and promote the mineral exploration sector.
• Importance of Mineral Exploration: Mineral exploration is crucial for securing future supplies of critical minerals and driving economic growth.

Global Metals Market Dynamics & Geopolitical Influences

Gold and silver have experienced significant price surges, reaching $2,736.10/oz and $94.88/oz respectively, marking an eight-month period of substantial increases. A key driver of current market dynamics is China’s increasing leverage in the metals market, particularly in iron ore and rare earths. In 2022, China established the China Mineral Resources Group (CMRG) to consolidate iron ore purchases, aiming to negotiate better terms with major producers like BHP and Vale, and potentially transition transactions to the Renminbi (RMB). Reports indicate CMRG is achieving markups of up to 80%. This strategy is viewed as both a protective measure against sanctions and a move to enhance China’s financial influence. David Casho of Wood Mackenzie notes the potential for RMB settlement to extend to other strategically important commodities like lithium, copper, and rare earths.

China is also securing access to resources through direct investment, exemplified by its involvement in the Samandu iron ore mine in Guinea, with China Baowu holding a significant share. This diversifies China’s iron ore supply beyond its traditional reliance on Australia and Brazil. Myanmar is also a critical source of heavy rare earth elements, with almost all of it flowing into China for processing, as highlighted by Richard Horsey of the International Crisis Group. The host draws a historical parallel to ancient Greece, where silver discoveries fueled the Athenian empire, underscoring the enduring importance of precious metals.

US Response & Supply Chain Security

In response to China’s growing dominance, the US is pursuing a strategy focused on diversifying its critical mineral supply chains. This includes establishing a $2.5 billion Critical Minerals Stockpile and engaging with allies to secure alternative sources. Examples of this include investments in projects like the Samandu iron ore mine in Guinea and agreements like Tesla’s with Sierra Resources for graphite supply and its investment in Mangrove Water Technologies for lithium refining. The US is also focused on encouraging domestic production.

Challenges & Opportunities in British Columbia

Todd Stone’s transition from provincial politics to President and CEO of AMEBC provides a unique perspective on the challenges facing the mineral exploration sector in British Columbia. Despite positive rhetoric from governments regarding support for the sector, Stone argues that “tremendous amount of complex policy” hinders progress. AME is actively engaged with government on eight major files, aiming to address these issues.

Three primary challenges are identified: lengthy permitting delays (amongst the longest in the Western industrialized world), ambiguity regarding authority over project approvals (between the provincial government and First Nations), and, most critically, land access restrictions. AME’s analysis reveals that 47% of British Columbia is already restricted for mineral exploration due to various conservation designations, exceeding the provincial government’s “30 by 30” conservation target. Stone uses the analogy of “turning up the temperature of the water with the lobster” to illustrate the cumulative impact of these restrictions.

AMEBC’s Proactive Approach & Policy Solutions

AMEBC is adopting a proactive approach, focusing on presenting solutions to the government rather than simply identifying problems. This includes collaborative initiatives where AME members work directly with government bureaucrats to streamline permitting processes. Stone emphasizes the importance of understanding the long-term impact of policies on exploration, which precedes mine development by 10-20 years. AME is advocating for a re-evaluation of the definition of “conservation” within the 30 by 30 framework. He stresses the need to address “obscure” policy details that could undermine stated ambitions for the sector.

Roundup Conference & Future Outlook

The upcoming AMEBC Roundup conference (January 26-29), expecting over 6,500 delegates from 42 countries, serves as a key platform for industry engagement and innovation. The conference theme is “Minerals for a Changing World” and will feature key speakers, including the Premier of BC and representatives from Anglo American, with a focus on technological advancements like AI and machine learning. A discounted student pass ($75) is available for Thursday.

Conclusion

The current metals market is undergoing a significant shift, driven by China’s strategic efforts to secure resource control and the global push for supply chain diversification. While opportunities exist for nations to reduce reliance on China, significant policy hurdles, particularly in jurisdictions like British Columbia, must be addressed to unlock the full potential of mineral exploration and development. AMEBC’s proactive approach to policy advocacy and its focus on presenting solutions offer a promising path forward for the sector, emphasizing the critical role of mineral exploration in securing future supplies of essential resources.