Canada’s battery supply credibility rises as multi-million dollar announcements keep coming

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Federal Innovation Minister Francois-Philippe Champagne is selling Canada’s battery supply chain prowess again in Asia this week, but this time he has a new boast in his back pocket.

Research firm BloombergNEF pushed Canada’s position in its annual global ranking of battery-producing countries ahead of all others except China.

“That’s something I’m going to use a lot on my trip to Asia, to say we have what Asia needs,” Champagne said.

The survey ranks 30 countries with a significant presence in the industry, from the extraction of raw materials to the production of batteries and their components.

The first version in 2020 ranked Canada fourth, and in 2021 fifth, after mine production fell and regulatory hurdles rose.

But Canada has announced more than $15 billion in investments over the past 10 months in areas ranging from mining and critical mineral processing to battery component manufacturing, electric vehicle production and the country’s first gigafactory.

That helped Canada outperform Sweden, Germany and the United States, even with the latter’s massive investments under the Inflation Reduction Act.

“I think this is a home run for Canada in the sense that the vision was really to build an ecosystem from mine to recycling, and now it’s taking shape and what we’re doing now is optimizing it,” Champagne said.

His trips this week to Japan and South Korea, along with stops next week in Germany, are in that vein. He has already met with key industry players in those countries several times, both in Canada and abroad, but says he is focused on cementing those relationships and continuing to make the case for Canada as a presence on the ground.

The battery supply chain has many links, beginning with the extraction of raw materials such as lithium, nickel, aluminum and copper that are used to make batteries. Those minerals and metals are then refined so that they can be used to make the components of battery cells, that is, cathodes, anodes, and electrolytes.

The components are then put together to make battery cells, which resemble the same non-rechargeable alkaline batteries most consumers are familiar with, and then gigafactories package those cells in bulk to make battery packs that work. with everything from laptops and cell phones to electric cars.

The BloombergNEF report looks at all those parts of the supply chain, as well as final product demand and environmental stewardship.

Canada scores one of the highest marks for keeping the supply chain green, thanks in part to a generous supply of renewable energy, but also environmental regulations around mining. The BloombergNEF survey also recognized Canada for its efforts to boost mining activity.

Canada still lags behind in battery cell and component manufacturing and in domestic demand for electric vehicles, but there have been many announcements in the past year to improve both.

Vic Fedeli, Ontario’s minister of economic development, told The Canadian Press following a trip to meet industry stakeholders in Germany last month that one of Canada’s biggest selling points is its access to raw materials. needed to make batteries.

“They talk about our critical minerals and that’s when we know we have their genuine interest because there are a finite number of active producers of critical minerals outside of China,” he said. “We really have a captive audience.”

While Canada is not the largest producer of any of the major metals and minerals needed for batteries, it is one of the few places in the world capable of producing them all.

Canada and its allies are also trying to prevent China from using its dominance in the battery supply chain industry to influence world politics. They have likened it to Europe being too dependent on Russia for gas.

Having started investing in the sphere more than a decade ago, China is now home to three-quarters of all battery cell manufacturing capacity and 90 percent of anode and electrolyte production.

Its production of raw minerals is not always the highest, but it has invested heavily in mines in other countries, including Canada, to bring those products to China for refining and use in manufacturing. The US Geological Survey said China produced about 4 percent of the world’s nickel last year but refined more than two-thirds.

It mined about 14 percent of the lithium produced in 2021, but refined 59 percent.

Canada is beginning to take steps to limit China’s influence within the domestic supply chain. Earlier this month, Champagne said Canada will limit the participation of foreign-owned state-owned companies in the critical mineral sector, and a week later ordered three Chinese companies to sell their interests in small Canadian companies.

But there are many more, including the only currently operating lithium mine in Canada. The Tanco mine in Manitoba is owned by China-based Sinomine Resource Group.

Champagne did not say what other orders are coming, but hinted at additional announcements.

“I will be like a hawk watching these transactions to make sure we protect the national and economic security of Canadians,” he said.

This report from The Canadian Press was first published on November 21, 2022.

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