Written By Sander A.J.R. Grieve, Linda Misetich Dann and Andrew Disipio

Despite challenging capital markets for mining companies, the PDAC conference saw relative enthusiasm and optimism amongst its attendees. One area of particular focus for governments remains efforts to encourage investment in critical minerals as a key to strategic and green priorities. While this doesn’t help the precious metals space, it does provide some encouragement for the sector more broadly. The announcement of collaboration between Canada and Australia on critical minerals during PDAC is a good sign of cooperation between these two important mining markets and public sector commitment to the space.

Impacts of Canada and Australia Collaboration on Critical Minerals

The collaboration between Canada and Australia on critical minerals provides further support for the global transition towards sustainable energy and resource management. As the governments embrace and encourage clean energy technologies and decoupling strategic metals from dependence on single providers, the demand for critical minerals used in batteries and other key components is expected to continue to rise. Recognizing the strategic importance of these minerals, Canada and Australia have forged a partnership to promote their shared priorities in the extracting, processing, and refining of critical minerals.

Announced during the annual Prospectors and Developers Association of Canada (PDAC) conference in Toronto, Canada, this collaboration underscores the commitment of both nations to harness their abundant mineral resources for the benefit of domestic industries and the global economy. With large deposits of critical minerals, including lithium, cobalt, and rare earth elements, Canada and Australia are well-positioned to play a leading role in meeting the growing global demand for these essential commodities.

Through this partnership, Canada and Australia aim to explore opportunities for research and development (R&D) collaboration, support bilateral trade and investment in the mining and service sectors, and promote transparency and sustainability in the critical minerals supply chain. Led by Canada’s Natural Resources Ministry and Australia’s Critical Minerals Office, this joint effort reflects a stated policy of shared governmental commitment to encouraging responsible resource development.

The key elements of this stated policy are as follows:

Domestic Impacts:

• Business Opportunities: The joint efforts of Canada and Australia aims to create opportunities for businesses involved in the extraction, processing, and refining of critical minerals. With both countries boasting large deposits of these minerals, domestic businesses stand to benefit from increased demand.
• Research and Development (R&D) Initiatives: The collaboration aims to foster R&D initiatives with a focus on opportunities for improving extraction, processing, and refining technologies to drive efficiencies and innovation within the sector.
• Trade and Investment: The partnership's focus will be to support bilateral trade and investment within the mining and service sectors. By aligning their efforts, Canada and Australia are aiming to attract more investment and facilitate smoother trade relations, bolstering economic growth in both countries.
• Transparency and ESG Standards: The collaboration looks to promote transparency in the critical minerals supply chain and emphasize ESG credentials. This commitment to sustainability objectives is anticipated to align with public sector mandated global standards and expectations, with a belief that such standards might enhance the reputation of domestic businesses in the international market.

Foreign Impacts:

• Investment Attraction: The partnership between Canada and Australia is meant to send a signal to foreign investors about the stability and attractiveness of investing in the critical minerals industry in these countries. Following on recent setbacks to foreign investors, the Canadian and Australian governments hope that these collaborative efforts may be viewed favorably and might lead to increased investment inflows.
• Market Competitiveness: By coordinating their policies and investments objectives, Canada and Australia aim to regulate towards shared best-in-class standards to create a more conducive environment for businesses to thrive. If successful, this might enhance the competitiveness of domestic businesses in the global market, with a hope that it will assist in positioning them as preferred suppliers of critical minerals.
• Global Supply Chain Stability: The desire of these two governments is to collaborate, as two major suppliers of critical minerals, and ultimately contribute to the stability of the global supply chain. By working together, Canada and Australia have designs on mitigating supply chain disruptions and ensuring a reliable flow of critical minerals to meet global demand and allow allies to take advantage of opportunities for "friend-shoring".
• Diplomatic Relations: The partnership demonstrates strengthening diplomatic relations between Canada and Australia following an unusual period of these two long-time allies seeming to be misaligned on policy initiatives. Many aspire that this will be a first step towards further collaboration in other sectors.

You are encouraged to contact your Partner at Bennett Jones LLP about opportunities for you and your business in light of developments in mining policy in Canada and wherever you do business.