The Québec Mining Scene
Operational excellence, or failed battery strategy
Will Québec manage to unleash its unparalleled mining potential? The unprecedented wildfires suffered in the north of the province, the macroeconomic slowdown and the geopolitical turmoil observed in the 12 months since H2 2023 have tempered La Belle Province’s ambitions, without deterring them. Québec even climbed the ranks of the Fraser Institute, sitting at a comfortable fifth spot in 2023, further placing the province as a leader in global sustainable mining. The coming years will be those of execution as Québec targets the pole position in the critical minerals race. Beyond its gold output, lithium, graphite, and rare earths will have to (eventually) enter commercial production for Québec to match its circularity ambitions, from production to recycling. But both for the planet and investors, time might be running out. In the year of the Olympic Games, Québec’s mining industry would be well advised to switch from marathon to sprint pace in the global race to market for critical minerals.
Geopolitics at the wheel
Disruptions and market changes brought by the war in Ukraine, the Israel-Gaza conflict, and the ever-looming threat of escalation between China and Taiwan, will likely dominate the remainder of 2024. Looking south to its US neighbor, the significant uncertainty surrounding the upcoming US elections means Canadian companies must act swiftly to secure financing and partnerships before any market volatility arises.
With this in mind, Québec enters the global arena with the firm intention of consolidating its position as a strategic partner for the West. With China holding over 80% of the production and processing of critical and strategic minerals (CSMs, such as nickel, copper, cobalt or lithium), the world is once again eyeing La Belle Province’s resources. For Jean-François Béland, VP of strategic sectors at Investissement Québec, a government corporation that injects millions in support funding for mining projects in the province, it is firstly Québec’s political environment that is reassuring for allies: “There is no political risk in Québec: The government parties are not anti-mining. It is centered, consensual, and appealing, especially in the current geopolitical context.”
In an era when the discipline of geopolitics is (once again) taking center stage, NATO allies are pilling up outside of Québec’s door for their CSM needs. Global tensions are a good reminder of the importance of speaking a common language with long-term allies. In April, former French Prime Minister Gabriel Attal visited Montréal on his first trip outside of Europe to emphasize the close historical and cultural ties between the Hexagon and La Belle Province. Beyond discussions about the French language, Prime Ministers Attal and Legault pushed forward on a free trade deal about critical minerals.
Down the line, the mining landscape in Québec will likely continue to be reshaped by geopolitical drivers well into 2025 and 2026. With Western players trying to secure IRA-compliant feed, two trends are strengthening in the province. First, the push for more CSM projects to come online: Nemaska and Nouveau Monde Graphite (NMG) are nearing completion of construction on their processing plants and mines. Québec Mining Association figures show that only 0.7 mines start production per year in the province (most of them gold), too low of a figure to meet the West’s ambitious green energy transition targets. Second, the sustained investment by OEMs and foreign conglomerates in the transformation of critical minerals in Québec. Fasken recently accompanied Panasonic in its offtake Agreement for the acquisition of 18,000 t/y of active anode material from NMG's planned Phase 2 integrated ore-to-battery production. Touching on this new type of deal for the province, Fasken partner Frank Mariage stated: “OEMs are actively taking early stakes in developers to make sure they have a first crack at the material, and those off-takes are a new type of financing in Québec. Getting access to feed is so critical, particularly given the geopolitical context.”
“Looking ahead to 2025-2026, we anticipate a surge in new operations, with projects like Nemaska and Nouveau Monde Graphite nearing completion of construction on their processing plants and mines.”
Josée Méthot, President and CEO, Québec Mining Association (QMA)
Addressing the Dragon in the room
The more years pass, the more it appears that removing the West’s dependence on Chinese materials is utopic, at best. Beijing for now sits on a near monopoly of the raw materials the West craves: In 2022, China produced over 70% of the world’s graphite and 68% of rare earths. Beyond production, Beijing’s grasp is even more significant on the processing of materials needed for EVs, electric motors or green technologies: It processes around 67% of the world's lithium supply, 73% of cobalt, 70% of graphite, and 95% of manganese.
In response to this dominance, the US and Canadian governments have played the national security card to block Chinese investments in critical minerals. In 2024, the US imposed tariffs on US$18 billion worth of Chinese imports and Canada added stringent measures regarding foreign capital entering the mining industry. To curb Chinese economic influence, the Canadian government enacted the ICA in late 2023. This legislation allows the government to review and reject foreign investments that are not considered beneficial to the Canadian economy and society, while encouraging "positive foreign investment." The national security aspect of the ICA is reportedly being used to block Chinese investments in Canada's mining sector.
What the West truly lacks is the development of a critical minerals supply chain outside of China. While the West was entering a process of deindustrialization, Beijing was pouring billions of dollars into refineries, processing plants, and conversion facilities domestically and throughout Africa notably. Driven by the need for increased supply chain resilience and flexibility, North America and Europe have in recent years started a reindustrialization process, with firms like Capgemini projecting investments towards domestic manufacturing to reach US$3.4 trillion over the next three years. “The Canadian and Québec governments went into the critical mineral game full throttle and are significantly supporting the development of a critical mineral and battery value chain in North America as the continent aims to become self-sufficient concerning any critical commodity. The dream is local production for the local market,” explained Réjean Girard, president and CEO of IOS Services Géoscientifiques, who emphasized that the world would require approximately 35 Nemaska lithium-sized mines to be developed to green energy goals.
While the province is not yet a significant producer of lithium or copper, efforts made by governments since 2020 have positioned it as a processing force. Li-FT Power is currently conducting surface exploration for lithium-bearing spodumene crystals in James Bay. In the words of CEO and director Francis McDonald: “Québec's strategic role in the lithium supply chain, particularly for North American battery plants, could be pivotal, especially with potential geopolitical shifts driving a need for more localized supply chains.”
“To the credit of Québec, their push for critical minerals means that they are pushing permits faster. We got a drilling permit for the past season and the upcoming drilling season in less than 30 days.”
Jonathan Buick, President and CEO, Champion Electric Metals
Critical minerals circularity
In 2024, the government updated the list of CSMs from 22 to 28, adding high-purity iron, high-purity silica, aluminum, manganese, apatite, phosphate, and germanium to the list. For Josée Méthot, president of the Québec Mining Association, the drive is clear: “Currently, there are 36 mining projects under the government's radar, based on data from February 2024. Whenever a mining project reaches the preliminary economic study stage, it gets on the map. Of these 36 projects, more than half are focused on critical minerals,” she explained.
In 2024 more than ever, Québec positioned itself to the world as a province fit to become a leader in the production, transformation, and recycling of CSM. Within the Québec Plan for the Development of Critical and Strategic Minerals 2020-2025 (QPDCSM), the official policy states: “The circular economy is at the heart of the Plan.” Québec thus came up with the “Circular Economy Support Program for Critical and Strategic Minerals,” and notably funded the Lithion project aimed at developing a recycling technology for lithium-ion batteries. Maité Blanchette Vézina, Québec’s Minister of Natural Resources and Forests, said: “In addition to being a resource province, we want to make sure that mineral processing and recycling take place in Québec. There's a very clear interest in Bécancour for the battery value chain, and we want to work on other minerals such as high-purity iron that strongly contribute to steel manufacturing decarbonization.”
The presence of major global companies highlights Québec's significant role in the green energy transition. International players like GM, Panasonic Ford, Posco, EcoPro, Arcadium, and Northvolt are investing in Québec. For Sarah Maryssael, chief strategy officer and general manager of Canada at Australian giant Arcadium Lithium, which will be looking to produce lithium at the Galaxy project in the coming years: “Québec has put in the effort to attract downstream investment and make the province a place where companies want to set up battery and cathode factories, and in building this supply chain ecosystem will allow critical minerals producers to be part of an integrated battery supply chain.”
More than a “resource province”, Québec’s vision is to become a uniquely integrated player in North America. As exemplified by the Bécancour industrial park, Québec is once again a leader amongst its Canadian peers in this approach: Among the three largest mining jurisdictions—British Columbia, Ontario, and Québec— competing for critical mineral investment, only Québec has explicitly included circularity, recycling, and reuse in its official Critical Minerals Policy. So, what does an integrated critical mineral province look like in the future? One can envision lithium from the Whabouchi mine being transported via the Billy Diamond road to Matagami, where a hand-haul zone is currently being built, allowing truck traffic to transport the spodumene concentrate to Bécancour for lithium processing and upgrading in Trois-Rivières, in the “Battery Valley”. The vision is set, now Québec’s mining stakeholders must demonstrate operational excellence to execute the battery strategy and take advantage of this generational opportunity to lead global decarbonization efforts.
Article header image by vtwinpixel at istock, courtesy of Investissement Québec