Canada's mining sector can capture a larger share of global investment as the growing demand for critical minerals, rising development costs, and government support create new opportunities from mining to processing. Predictions indicate that by 2025, companies will spend approximately CAD 120 billion on projects outlined in Canada's 10-year outlook for major natural resource projects.
Market Analysis and Opportunities
This figure is CAD 50 billion more than the forecasts from 2018, although it still does not reach the peak of the previous cycle, which was around CAD 220 billion in 2026. The existing investment gap creates significant room for growth. BMO Equity Research forecasts that investment costs in Canada’s development will increase by more than 11% over the next two years.
Mining companies covered by BMO are expected to spend CAD 350 billion over the next five years on operational costs, sustainable investments, and growth projects. In its study, BMO has urged investors to shift towards downstream investments to make full production in Canada a reality.
Challenges and Solutions
To achieve this shift, new mining investments must focus on domestic copper smelting and refining, obtaining by-products, battery precursor materials, rare element separation, and other specialty materials. Infrastructure has always been a key area for investment in mining and can now open up new mining areas and create new opportunities across the country.
Given the importance of critical minerals in the global market, BMO recommends the development of supply chains for niche minerals that may require government intervention. Financing infrastructure could provide another avenue for expanding the industry. Separating infrastructure investments from mining development could attract specialized infrastructure funds and reduce capital costs.
Ultimately, BMO concludes that with increasing alignment among government, regulatory bodies, and citizens, Canada’s mining sector can deliver competitive and adequate returns and help finance the infrastructure and mining capacity needed to open new areas.
