A generational opportunity: The EV supply chain in northern Ontario

There is an enormous opportunity for northern Ontario on the horizon. The global move toward decarbonization and electrification is a large enough market opportunity to benefit all parts of the critical mineral supply chain. While the opportunity is vast, it is still possible for some regions to miss out by not capitalizing on the moment and failing to take advantage of the rare prospect that has been presented by this global shift.

As a lifelong northern Ontarian, I worry about missing opportunities for economic development, especially when our region is so well-suited to play a role. Ontario has a long history as an extractive, resource-based economy logistically linked from the mineral riches in the north to industrial production and access to export markets in the south. This economic model that relies on the extraction of primary resources for export is often described as a “staples economy.” While the way these resources are extracted and processed have advanced tertiary sectors, such as the mining supply and services sectors, mineral resources are still generally mined and smelted into pre-commercial form locally and shipped elsewhere for value-added manufacturing. Often, it is these more lucrative value-added development opportunities that elude resource economies, and most of the economic benefit is enjoyed in districts where raw resources are turned into commercial products.

The opportunity the increased demand for metals presents can also represent the occasion for more value-added processing and manufacturing to occur here as well. As a region, the least northern Ontario should do is to supply raw materials that feed into the bottom of the supply chain. The north can play a larger and more integrated role in the supply chain. From battery metal processing, cathode and anode production to end of life battery recycling, northern Ontario has all the pieces required to host the major industrial operations needed to make Ontario a powerhouse from mines to mobility and beyond.

All indications are that the growth in electric vehicle demand and the correlated growth in battery metal demand will be far-reaching enough to provide economic benefit to all districts that make up parts of the supply chain. In a 2021 outlook on the prospects for electric vehicle deployment, the demand for EVs is expected to grow from 11 million passenger BEVs in 2020 to between 145 million and 230 million in 2030. Accordingly, a report by Allied Market Research stated that the battery metals market size was valued at $11.3 billion in 2019 and is projected to reach $20.5 billion by 2027. All told, by 2040 upwards of 3.0 billion tonnes of metal could be needed in the clean energy transition. These materials are needed to create technology such as electric vehicle battery packs, solar panels, and wind turbines. This opportunity can be a tide that lifts all boats, but the degree to which we take advantage of this opportunity locally is still unclear. What is clear is that the northern hinterland has much to offer.

Northern Ontario has the largest concentration of mining and mineral processing knowledge in North America, and some have said, even the world. This expertise resides in the engineers, scientists, and operators that work in the mines themselves, but also in the wider mining ecosystem made up of engineering firms, technology companies, and research organizations. This ecosystem has spent the last hundred years developing, operating, and maintaining operations that have fed the world its critical minerals. It is also this intellectual advantage that makes the region ideal for new, large-scale industrial production. When it comes to mining and processing, the region four hours north of Toronto is unmatched.

It has been well-reported over the last two years that Ontario has a shortage of industrial lands that is impeding economic growth. This shortage was exacerbated by the Covid-19 pandemic, as warehousing space for online shopping and distribution gobbled up any vacancies near urban centres in the south of the province. What this means is those new industrial facilities servicing the critical mineral supply chain will have to look to rural and northern communities to find suitable lands. Northern Ontario is primed to answer that call as there is an abundance of vacant industrially zoned land and underutilized industrial properties across the north. Some of this land is un-serviced or underserviced, but the availability, competitive cost, and proximity to mine sites and transportation corridors can outweigh the up-front servicing costs. Moreover, there is a tendency among northerners to be more amenable to industrial developments happening in their backyards as most communities have co-existed with heavy industry for generations. Industrial projects with the potential for significant job creation are welcomed in the north, and the region has the lands needed for plants of the future to set up shop, provided this is done responsibly and in consultation with Indigenous communities.

We have a window of opportunity that will not stay open forever. While the market will be big enough to benefit many communities, things are moving quickly enough that firms will look elsewhere. If we fast-forward two decades and all we must show for it is a few new holes dug into the ground, we will have failed to take advantage of this generational opportunity. If, instead, we work together on a strategy of investment attraction and supply chain integration that includes the north as a key district for value-added processing, we have a chance at sustainable economic development that lasts far into the future. The north has the minerals, the people, and the land to be an attractive destination for companies looking to establish operations. What is needed now is a concerted effort to shout from the rooftops that we are open for business and ready to get to work building the economy of the future.

Steve Gravel is the manager of the Centre for Smart Mining at Cambrian College.

---