‘It’s the time’—Hon. Stephen Lecce, Ross Beaty and Mark Selby on mining in Ontario

Key Concepts

• Bullish Metals Market: Silver and copper are experiencing significant price surges driven by demand, supply constraints, and investment.
• Critical Minerals Security: Securing domestic supply chains for critical minerals is a priority for the US and Canada, reducing reliance on China.
• Ontario’s Strategic Plan: Ontario is investing heavily in energy infrastructure and fostering Indigenous partnerships to unlock critical mineral resources sustainably.
• Energy Transition & Demand: The demand for critical minerals is escalating due to the energy transition, AI development, and electric vehicle production.
• Geopolitical Considerations: Geopolitical factors, including Chinese export controls and potential alternative supply routes, are significantly impacting the market.

Metals Market Surge & Global Supply Chain Dynamics

Silver is currently in a significant bull market, reaching an all-time high above $64 an ounce with a 120% year-to-date increase – its best performance since 1979. This surge is fueled by ETF inflows, momentum trading, physical market tightness (following a squeeze in the London silver market), and expectations of rate cuts from the Federal Reserve, potentially including $40 billion in quantitative easing. Speculative fervor is evident in increased call option buying. However, analysts like Daniel Galley of TD Securities caution this could be a “risky blowoff top.” Copper prices are also soaring, nearing $12,000 per metric ton (up 35% this year), driven by tight supply and demand from data centers powering AI, electric vehicles, and the energy transition. A projected deficit of 124,000 tons this year and 150,000 tons next year is exacerbating the price increase, with investors viewing copper as a key asset in the AI boom. Gold reached $2,312.60/oz (+ $105 on the week) while nickel saw a slight decrease to $6.48/lb (- $0.28 on the week).

Rare Earths & Geopolitical Landscape

China is streamlining rare earth export licenses, initially to Ford suppliers and now to European companies, though the process is perceived as slow-moving. Concerns remain regarding heavy rare earths, largely controlled by China, with reports of India potentially securing supply through a deal with the KIA rebel group in Myanmar (denied by the Indian embassy). The US is actively pursuing domestic critical minerals production, including developing small-scale refineries for antimony, tungsten, rare earths, and boron. GE Vernova is working with the US government to increase its yttrium stockpiles due to Chinese export controls. A significant discovery of 16 rare earth and critical minerals has been made in the Utah desert by Ionic Mineral Technologies.

Strategic Partnerships & Project Development

Shareholders of both Anglo-American and Tech Resources have overwhelmingly approved the $50 billion merger. Several projects are underway to bolster critical mineral production. Frontier Lithium’s Pack Project in Ontario has been selected as the first project under Ontario’s “one project, one process” initiative, aiming to develop a full lithium production ecosystem. Canada Nickel’s Crawford Project aims to become the western world’s largest nickel sulfide operation, seeking partnerships with companies like Samsung SDI and leveraging government funding programs. Indonesia currently dominates nickel production, accounting for over 60% of global supply, projected to reach 75%, and ore grades have declined by 15% over the last 3 years.

Ontario’s Critical Minerals Strategy

The Ontario government is aggressively investing in power generation and transmission infrastructure in Northern Ontario, including new hydroelectric power led by Indigenous nations, a $1 billion transmission line to Greenstone and Red Lake, and lines to the Ring of Fire. A total of 1,500 kilometers of new transmission lines are authorized. A 25-year integrated energy plan has been authorized, providing investors with clarity on future megawatt generation and transmission capacity. Ontario is also leading the way in Small Modular Reactor (SMR) development, aiming to build the first in the G7, with 24 SMRs planned and potential sales to provinces like Poland (currently 50% coal-based grid).

Sustainable Mining & Indigenous Collaboration

There’s a strong emphasis on transitioning the mining industry towards greater innovation, including carbon storage, electric machinery, and clean energy integration. Ontario is prioritizing “green nickel” production to capture value-added premiums, driven by the CBAM and demand for sustainable materials. Strong emphasis is placed on 50/50 equity partnerships with Indigenous communities in transmission line projects and meaningful consultation in the Ring of Fire development, aiming to improve quality of life and provide economic opportunities. Road construction in the Ring of Fire is slated to begin in 2026. The Greenstone mine ($1.8 billion investment) is presented as a successful example of large-scale project execution. Caterpillar and Komatsu are testing battery-electric vehicles in Ontario due to the availability of clean power. The government is working to cut permit timelines in half while maintaining constitutional obligations regarding consultation with Indigenous communities.

Conclusion

The metals market is experiencing a significant bullish trend, particularly in silver and copper, driven by demand from the energy transition and technological advancements. Securing reliable and sustainable supply chains for critical minerals is paramount for both the US and Canada, necessitating strategic investments in domestic production, infrastructure development, and Indigenous partnerships. Ontario is positioning itself as a leader in this space through its ambitious energy plan, commitment to innovation, and collaborative approach with Indigenous communities, aiming to attract investment and establish a “green” mining industry. A shift in policy and mindset is needed to prioritize domestic resource development and compete effectively with global leaders like China.