{"id":25199,"date":"2026-02-27T03:49:00","date_gmt":"2026-02-27T03:49:00","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=25199\/geothermal-energy-surges-canadas-potential-in-a-promising-baseload-power-source"},"modified":"2026-03-27T14:09:33","modified_gmt":"2026-03-27T14:09:33","slug":"mine-refine-bridging-canadas-critical-minerals-capital-gap-2","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/energy-reports\/mine-refine-bridging-canadas-critical-minerals-capital-gap-2\/","title":{"rendered":"Mine & Refine: Bridging Canada\u2019s Critical Minerals Capital Gap"},"content":{"rendered":"\n
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Key Takeaways<\/h2>\n\n\n\n

Roughly $1 in $10 in Canada\u2019s mining sector has been directed towards pure-play critical mineral development over the past 25 years.<\/strong> The majority of the $700+ billion raised in Canadian mining equity and M&A has poured into other metals, with gold and precious metals accounting for 70% alone. In contrast, Australia directed twice that amount over the same period.<\/p>\n\n\n\n

Critical minerals are finally attracting a bigger share of mining investment. <\/strong>Around 67 critical minerals projects\u2014representing about half of all active mining proposals\u2014are currently planned, proposed, or under construction, with a potential investment of $72.4 billion by 2034, according to the Major Projects Inventory.<\/p>\n\n\n\n

Canada could account for 14% of the global supply across the six key critical minerals by 2040.<\/strong> Current Canadian production of six core critical minerals, cobalt, nickel, lithium, copper, graphite and rare earth, is on average 2% of global supply. It could rise to 14%, on average, at full capacity if identified projects come on stream, the Canadian government estimates.<\/p>\n\n\n\n

However, Canada lacks a strong base of well-capitalized domestic players. <\/strong>Only 19% of Canada\u2019s publicly listed S&P\/TSX Composite mining firms are diversified miners, compared to two-thirds of Australia\u2019s S&P\/ASX 300 mining index. To reach its goals, Canada will likely need to continue relying on international mining companies and foreign investors.<\/p>\n\n\n\n

Two decades of capital allocation decisions<\/strong> have stunted critical minerals\u2019 growth.<\/strong> Canada remains largely a \u201cmine-and-ship\u201d jurisdiction when it comes to critical minerals\u2014with much of the value add and refining picked up by China and other players who have captured the refining segment, and further developed ancillary supply chains, such as electric vehicle, electronics and defence industries.<\/p>\n\n\n\n

Despite trade tensions, there are still signs of U.S.-Canada capital alignment.<\/strong> Under President Donald Trump, the U.S. has invested an estimated US$135 million in direct equity stakes in Vancouver-based companies Trilogy Metals and Lithium Americas Corp., in addition to a US$2.3 billion bridge loan for Lithium Americas. It will be unlikely the U.S. can (or wishes to) completely phase out Canada from North America\u2019s critical mineral ecosystem.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Canada faces a critical minerals capital crunch<\/strong>. The absence of patient, risk capital severely impedes the country\u2019s ability to support both Canada and other Western nations in their efforts to move their critical mineral supply chains away from China.<\/p>\n\n\n\n

\"Realizing<\/figure>\n\n\n\n

That capital is needed for Canada to take advantage of the critical minerals industry that’s projected to grow between two to three times globally with a capital requirement of US$500-600 billion by 2040, according to an International Energy Agency forecast. Global demand for six core commodities\u2014cobalt, copper, graphite, lithium, nickel and rare earth elements\u2014will be driven by several growth sectors, including electric vehicles, clean energy infrastructure and space. As well as strategic sectors such as defence, manufacturing and electronics.<\/p>\n\n\n\n

Canada holds world-class geology across all six metals but remains a relatively marginal player, accounting for roughly 2% of the global supply of the six metals. If identified projects proceed at full capacity, it could climb to 14% of total supply over the next 15 years, on average, according to Canadian government estimates. The development of vertical supply chains such as an expanded advanced manufacturing base, could have an exponential impact on Canadian supply to meet domestic and international demand.<\/p>\n\n\n\n

Yet, Canada remains largely a \u201cmine-and-ship\u201d jurisdiction. Raw metals are shipped mostly to China where they are refined and transformed into high-value components. It’s the result of two decades of capital allocation decisions and the lack of a robust national strategy, but also China\u2019s ability to depress metal prices to crush competitors.<\/p>\n\n\n\n

There\u2019s considerable global momentum to propel the Canadian critical minerals industry forward. The U.S. is leveraging its funding, market mechanisms and guarantees to build out a critical minerals market that excludes China. Meanwhile, Europe and several G20 allies are eager to diversify their critical minerals supply chain as they fear the Chinese industrial machine will crush their domestic economies and leave them ever more beholden to Beijing.<\/p>\n\n\n\n

China\u2019s recent export controls on key minerals\u2014including rare earths, graphite, gallium, germanium\u2014over the past year are a clarion call for Western countries to act.<\/p>\n\n\n\n

Among its G7 allies, Canada is best equipped to take advantage: it\u2019s home to high-grade lithium belts and graphite deposits in Quebec and Ontario, globally significant nickel resources in Manitoba, formidable copper reserves in British Columbia, and rare earth elements in pockets across Canada, including Newfoundland and Labrador. Few countries can claim this breadth across all six critical minerals at scale.<\/p>\n\n\n\n

We have identified five structural pressure points that explain why Canada\u2019s critical minerals sector remains undercapitalized, and why market forces alone will not correct the imbalance. Closing the gap requires a coordinated public-private agenda anchored in sovereign co-investment, infrastructure financing, miner-driven shared processing corridors and integration into Western supply chains.<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Structural Pressure Points<\/h2>\n\n\n\n

1. The loss of national champions<\/strong><\/h3>\n\n\n\n

Between 2005 and 2012, more than $119 billion in Canadian base metals and steel assets transferred to foreign ownership.<\/p>\n\n\n\n

\"The<\/figure>\n\n\n\n

The transactions were part of a wider globalization trend: foreign capital was expected to unlock value faster than our limited domestic capital markets, and nationality of ownership mattered less than the resulting economic uplift from mineral production and job creation. What that consensus underestimated was the long-term cost of losing domestic companies capable of anchoring new project developments\u2014for a future era.<\/p>\n\n\n\n

As Canada\u2019s domestic giants were subsumed into global majors, the domestic capital-raising ecosystem was also disrupted. Boutique mining dealers shrank from around 60% of deal flow in 2010 to effectively 20% today, according to S&P Capital IQ. A similar trend is seen across capital holders as well, with resource-specialist funds now making up only 1-2% of domestic equity mutual fund assets under management today, compared to 6-8% in the early years following the global financial crisis, according to ISS MI MarketSage.<\/p>\n\n\n\n

Many of the national champions that could have spearheaded Canada\u2019s lithium, graphite and rare-earth projects largely no longer exist. Meanwhile, global majors allocate capital across their global portfolios that may not align with Canada\u2019s strategic, sovereign objectives. This dynamic stands in marked contrast to the oilsands, which is the predominant operating asset controlled by large domestic players with large domestic ownership.<\/p>\n\n\n\n

2. Capital consolidation around gold took the shine off other metals<\/h3>\n\n\n\n

Of the $700 billion raised in Canada in mining equity and mergers and acquisitions over the past 25 years, only 11% of capital was channelled to pure-play critical minerals development, according to S&P Capital IQ and LSEG. In contrast, Australia directed over twice as much capital to critical minerals during the same period. This was partly due to geology (Australia\u2019s copper deposits are larger and less associated with gold), and partly to a closer proximity to Chinese and East Asian smelters.<\/p>\n\n\n\n

The higher gold concentration in Canada reflects a historical M&A wave, with the S&P\/TSX Composite mining complex becoming increasingly dominated by a smaller pool of large gold producers. In essence, Canada\u2019s public mining equities evolved into a precious metals financing platform\u2014a result of structural choices made over two decades across Canada\u2019s critical minerals companies.<\/p>\n\n\n\n

It doesn\u2019t have to be a zero-sum game between gold and critical minerals\u2014there is room to grow both mining sectors and even create ecosystems that feed off each other.<\/p>\n\n\n\n

However, in Canada excellence in gold did not necessarily extend to critical minerals for two reasons:<\/p>\n\n\n\n