Canada has a tremendous opportunity to gain global influence by capitalizing on its abundant rare earth deposits, otherwise known as the “oil of the 21st century,” says a new report by the Canadian Chamber of Commerce.
In the report, titled Canada’s Rare Earth Deposits Can Offer A Substantial Competitive Advantage, the chamber outlines the opportunity for Canada to start “punching above its weight” by leveraging its rare earth projects and deposits.
Rare earths are a series of 17 elements that have unique chemical, magnetic, and fluorescent properties. They are integral to the functioning of items such as hybrid and electric cars, fluorescent lights, plasma screens, portable computers, hand-held electronic devices, wind power generators, and optical and medical devices.
They are also widely used in defence applications such as missiles, lasers, satellite communications, and radar systems.
“Canada has 1.1 billion pounds of rare earths locked in black shale deposits (the Alberta Black Shale Project) worth an estimated $206 billion. In addition, several other Canadian mines across the country show great potential,” says Perrin Beatty, president and CEO of the Canadian Chamber of Commerce.
“We have been blessed with great geology and we have a tremendous opportunity to turn our resource richness into a significant competitive advantage,” he added.
Rare earths have been largely ignored until recent years when they became widely used in popular devices such as smartphones, laptops, and plasma screen TVs.
We have a tremendous opportunity to turn our resource richness into a significant competitive advantage.
—Perrin Beatty, Canadian Chamber of Commerce
Over 90 percent of rare earths come from the Bayan Obo mining district in China. Countries around the world have been rushing to develop their own deposits after China recently decreased exports to satisfy the demand of its own internal markets.
Over the past several years, China has also been raising export duties and reducing export quotas on some rare earth elements. This led the United States, Japan, and the European Union to file a complaint at the World Trade Organization earlier this year.
“With the Japanese, Americans, and Europeans now searching for ways to counter China’s monopoly, Canada is in a very enviable position,” says Beatty.
The biggest deposits outside China can be found in Canada, Russia, the U.S., Australia, India, and South Africa. The challenge is to introduce the necessary infrastructure and processes to mine and process these rare earths economically and in an environmentally responsible way.
Until recently, processes to release rare earths from black shale deposits in Canada were considered risky and hazardous to the environment, says the chamber report, but new technology has now been developed to mitigate the risks.
The report highlights several Canadian-based mining companies that are gearing up to develop deposits across the country, and anticipates full production in some areas could start as early as 2015.
The company that is able to produce the soonest will likely capture a strategic industry position, as many countries are desperate to offset their dependency on China.
Companies that experience start-up delays may miss the chance to stake their position in the global market, the report says.
The report concludes that if Canada is able to harness the resources quickly and effectively, it could provide a significant portion of global rare earths exports which would boost its political influence.“Rather than being the unassuming neighbour of the United States, the hunger of the world’s economy for resources may mean that Canada will increasingly have political leverage and influence,” says the report