PwC’s Mark Patterson on BC, the Yukon and critical minerals

Key Concepts

• Critical Minerals & Supply Chain Security: The strategic focus on securing domestic and allied supplies of metals like aluminum, tungsten, and rare earths to reduce dependence on China.
• Geopolitical Risk: The intersection of mining operations with war, sanctions, and political instability (e.g., DRC, Mali, Bolivia, Cuba).
• Resource Nationalism: Policies in countries like Indonesia and Zimbabwe requiring local processing and export controls to capture more value from mineral wealth.
• Infrastructure & Permitting: The critical role of government-backed infrastructure (power, ports, rail) and the challenges of navigating complex environmental and indigenous consultation processes.
• ESG & Indigenous Partnerships: The shift from transactional impact benefit agreements to collaborative, equity-based partnerships with First Nations.

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1. Ebola and Mining in the DRC

The Ebola outbreak in the northeastern Democratic Republic of Congo (DRC) is being linked to illegal gold mining operations.

• Key Details: Miners in towns like Mongalu often work in hazardous conditions with minimal safety equipment.
• Social Dynamics: A deep distrust of foreign aid and medical institutions—exacerbated by post-COVID skepticism—has led to violence against medical staff.
• Context: The report highlights the dangerous convergence of war, resource extraction, and public health crises, drawing parallels to historical accounts of plague during wartime.

2. Aluminum: Global Shifts and Strategic Assets

The aluminum sector is undergoing significant consolidation and geopolitical maneuvering.

• Alba/Dunkirk Deal: Aluminum Bahrain (Alba) is acquiring the EU’s largest smelter, Aluminum Dunkirk, for $2.2 billion. Analysts question why Europe is offloading such a strategic asset, though the deal includes a 6% stake for the French state-backed bank Bpifrance.
• Oklahoma Smelter Lawsuit: A $4 billion project in Oklahoma, backed by the Trump administration, faces a lawsuit from the state’s Attorney General, citing environmental concerns and the project's ties to UAE sovereign wealth funds.
• Scrap as a Resource: Aluminum scrap is evolving into a strategic resource, with nations like the US, Japan, and EU members implementing policies to retain domestic supply.

3. Tungsten and Rare Earths: The Race for Supply

• Tungsten Bidding Wars: Chinese buyers are aggressively purchasing US tungsten scrap, reportedly paying up to five times the market rate. This has driven scrap prices up 350% since May 2025, outpacing the rise in primary metal prices.
• Rare Earth Initiatives: The US Department of Energy is funding projects in Louisiana and Oklahoma ($134 million) to extract rare earths from industrial waste (tailings/bauxite). These projects involve partnerships with MIT and the Colorado School of Mines, signaling a "pro-science" approach to supply chain independence.

4. Regional Mining Updates

• Indonesia: Nickel smelter utilization has dropped to 76% due to government-mandated cuts in ore production quotas, aimed at preventing a market surplus.
• Mali: Resolute Mining reported production declines due to regional insecurity, which has disrupted the supply of explosives and logistics.
• Guinea: The Simandou iron ore project is ramping up, with exports reaching 2.2 million tons in May, potentially reshaping global iron ore markets.
• Russia: Russia claims it will produce 480–500 tons of gold in 2025, a figure significantly higher than independent estimates from the World Gold Council.

5. Canadian Mining: Insights from PWC’s Mark Patterson

Mark Patterson (PWC BC Mining Leader) discussed the state of mining in Western Canada and the Yukon.

• The "Land of the Slow Maybe": Patterson notes that while sentiment is positive, the industry struggles with long, complex permitting timelines. He argues that Canada must move from "starting with no" to a "get to yes" framework.
• Infrastructure as a Catalyst: Patterson emphasizes that individual companies cannot build regional infrastructure (power lines, ports) alone. Government and indigenous partnerships are essential to open up regions like the Yukon and BC’s Golden Triangle.
• Indigenous Partnerships: A "maturing" of relationships is occurring, moving from transactional agreements to equity-based partnerships (e.g., Tahltan Nation’s involvement with Skeena Resources).
• Eagle Gold Mine: The receivership of the Eagle Gold site (Yukon) by PWC and the potential sale to Singapore-based Boru has raised questions about why Canadian firms are not leading the recovery of such assets.

6. Synthesis and Conclusion

The global mining landscape is currently defined by a tension between market forces and geopolitical intervention. Governments are increasingly acting as "concierges" for strategic projects, using grants and sovereign wealth funds to secure supply chains. While Canada and other Western nations possess significant mineral endowment, the primary bottleneck remains the "physics" of development: the time-consuming nature of permitting, the need for massive infrastructure investment, and the necessity of building genuine, long-term partnerships with indigenous communities. The shift toward "critical minerals" is not just a narrative; it is driving a structural change in how mining projects are financed, permitted, and integrated into national security strategies.