PDAC: Event highlights urgency of getting shovels in ground

Time is of the essence if miners are to deliver the minerals that are needed to power the energy transition.

That sense of urgency was front and centre this week as Toronto hosted the world’s biggest mining convention while Canada-U.S. relations erupted into a trade war. More than 27,000 people attended the Prospectors & Developers Association of Canada’s annual conference from March 2-5. Some 1,100 exhibitors, including government officials, company executives and technical specialists from around the world also took part.

While government officials acknowledged more must be done to speed up permitting and close the extraction and processing gap with China, company executives said they’re looking for ways to enhance efficiencies via automation and artificial intelligence. Both sides underlined the urgent need to attract the next generation of workers to mining careers to close the widening talent gap.

Demographics, urbanization and increased electrification are major reasons why the world needs mineral production quickly ramp up. By 2050, Earth will be home to almost 10 billion people – about 25% more than today. Many more people will be living in bigger cities – which will mean more cars, more high rises, more phones and more data centres.

“All of this is going to require more steel, more iron ore, more potash, more copper and other metals and minerals,” BHP CEO Mike Henry said in his keynote address March 2.

In copper alone, demand is expected to jump 70% by the middle of the century, he added.

Transition progress lagging

Tom Hunt, vice president of technology at KoBold Metals, a U.S. mining startup backed by Amazon founder Jeff Bezos and former Microsoft CEO Bill Gates, put things more bluntly.

“We’re not on track for the energy transition,” he said during a panel discussion at PDAC. “We need to discover hundreds of new resources and bring them into production over the next several years, and that’s simply not happening.”

Henry, who was attending the event for the first time, noted “almost unprecedented interest” in mining and the critical minerals supply chain.

“It’s certainly the most (interest I’ve seen) in my 35 years in this industry,” he said. “More people have woken up to the fact that the development of our world and the well-being of billions of people depends on the materials that we extract from the ground. We have become the centre of a global conversation.”

On an anecdotal level, The Northern Miner’s video production team was overwhelmed with interview requests during the conference. Our crew recorded 52 videos over the four days, producing interviews with analysts, bankers, executives and ministers as well as paid-for joint venture content.

Scarcity headwinds

To boost production and meet long-term demand, miners will seek to overcome a long list of challenges – starting with resource scarcity.

“Big deposits are becoming harder to find,” Henry said. “They are deeper, they’re more remote, they come with new technical challenges and they’re often in riskier jurisdictions. This means rethinking where and how we invest in exploration.”

Growing resource nationalism is also an issue. Guy de Selliers, a partner at the London-based investment bank Hannam & Partners who focuses on mining, said he worked on three investment projects over the last three years that were scrapped because of political instability of some sort – including a coup.

“I’m worried because resource nationalism is on the rise, as is instability,” de Selliers said March 3. “Of course, what’s happening in Washington doesn’t help. Nationalism is a lose-lose. If there is one industry that is going to be affected by resource nationalism and growing instability, it’s mining. Because these are 20-, 30-, 40-year projects. Investors know that, and they worry.”

Other areas of concern for miners include rapidly falling grades on new projects and ever-lengthening permitting delays. Bringing a new mine into production in Canada can take up to 25 years, the federal government said in its 2022 critical minerals strategy.

“There has to be way more investment quickly,” Ted McGurk, head of investment banking at TD Securities in Vancouver, told attendees March 4. “If we want to achieve any of our goals on electrification and AI, we need more and more minerals and metals. Strong commodity prices definitely help, but we have to get risk out of the business, and the permitting timelines have gotten ridiculous. Our governments have to do more.”

Taking heed

Government officials who spoke at PDAC seem to have heard the message.

Federal Energy and Natural Resources Minister Jonathan Wilkinson used his time at the conference to announce a two-year extension of the tax credit on mineral exploration to boost investment in junior mining companies. The measure, a capital market tool that offers investors a 15% tax credit to invest in flow-through shares of small project holders, was due to expire on March 31.

Ontario Premier Doug Ford, fresh off his election win, reiterated plans to expedite development of the Ring of Fire region. He also scolded the federal government for time-consuming environmental approvals and vowed to fight potential U.S. tariffs dollar for dollar.

Early results from this shift in attitude are encouraging. Companies with plans to mine critical minerals in British Columbia have received calls from the provincial government saying their project would be fast-tracked, John Turner, co-leader, of Fasken’s global mining group, told The Northern Miner this week. Ontario, Quebec and Nova Scotia are also being aggressive in pushing projects, he said.

“That part is encouraging,” Turner said. “You know, it’s long overdue, and it’s unfortunate that it took something like (the U.S. tariffs on Canada) to be the impetus, but it is very good to see. It’s refreshing.”