Digging In: Canada’s Mining Innovation Opportunity

By Claire Wilson & Laurent Carbonneau

Anyone who’s had even a passing interest in the news this year knows we are already witnessing profound transformations in the global economy.

Countries are spending billions on defence, and we are seeing a massive global energy transition.

But these massive shifts also signal something else — enormous new demand for the minerals and materials that manufacturers need to build the future.

Just the global energy transition driven by climate change is expected to more than double the need for critical minerals, reaching US$770 billion by 2040, and there are other shifts that will likely drive demand even higher.

Advanced manufacturing simply isn’t possible with critical minerals, and luckily for us, a lot of the ingredients of the future economy are buried under Canadian soil — Ontario’s Ring of Fire alone contains many billions of dollars worth of them.

We have big advantages here. Yes, we’ve got lots of critical minerals sitting underground all over the country, but arguably that isn’t even our most important advantage.

Canada is a stable, democratic country with regulatory certainty. We’re also home to half the world’s publicly traded mining and exploration companies. Canada is to mining as France is to soft cheeses — other countries do it too, but we do a LOT of it.

And since we’re already a global powerhouse in mining expertise, we have a head start on the exciting opportunities that this moment is offering.

We can entrench Canada as a leader in this critical enabling sector, and plug ourselves into important, high-value parts of global value chains. We can shore up our sovereignty by acting as a valuable ally and trading partner.

When people talk about mining, they tend to focus on physical extraction, and just take all the details for granted. People think of countries having mineral deposits, and mining companies just dig ‘em up. The ore is treated as the beginning of a manufacturing value chain.

This perspective misses an important reality, though: mining is a value chain in and of itself. Exploration, blasting, mine operations, and refining are all steps along this chain, and there is plenty of opportunity for innovation and technology development in high-value niches.

Mining is no longer a low-tech field of merely digging up ore. The world has largely exhausted the easy-to-reach deposits of high-quality ore, and environmental requirements for mining are stricter than they were in the past. Companies have to re-think how they find, drill and process minerals.

As a result, there is a lot of wealth created further upstream in the minerals value chain. Companies are looking deeper into the earth to find new reserves. Geospatial technologies and novel drilling techniques make this possible. Building on Canada’s existing advantage in mining and doubling-down in IP-heavy, upstream sectors will strengthen our existing position, buttressing the industry’s position as an invaluable engine of domestic economic growth.

Mining is one of Canada’s most productive industries, and mining exploration is where Canadian mining is already most heavily specialized compared to other countries. This upstream, tech-heavy sector includes advanced drilling, geomatics, and surveying technologies.

Since 1970, the share of patents related to mining exploration has nearly tripled. This represents an explosion of innovation, and Canada is well-positioned to take advantage of it. What’s more, these kinds of innovations won’t only make our own mining sector more productive; we can also sell these services to mining companies all over the world.

The majority of mining innovation is driven by the mining equipment, technology and services sub sector (METS), which includes exploration. It’s a critical part of the larger mining ecosystem, supporting larger mining firms through specialized expertise and technology.

In Canada, METS firms play a particularly important role, employing more than a third of the country’s mining workforce. But in spite of their importance, policies often overlook them. Australia has adopted policies specifically aimed at helping these high-value METS companies sell their technology to global markets, and Canada should adopt the same strategy.

The government can also play a role in smoothing out the notorious boom-and-bust cycle of the mining sector. Consistent funding is critical to sustaining R&D efforts; by adopting programs that help companies continue to innovate through downturns, Canadian firms can be best positioned to reap the rewards of the boom times.

We’ve already seen some success in this area. Canada’s Critical Mineral Exploration Tax Credit launched in 2022 plays a key role in filling equity funding gaps and driving critical mineral exploration. By 2023 exploration expenditures were up more than eight-fold from 2020. Recent studies also indicate that the return on government investment into public geoscience research has a 7x multiplier.

At a time when national productivity and economic growth are stagnating, the government needs a clear strategy to seize global leadership in value chains we’re already a part of. Mining exploration is a growing, IP-heavy, and highly specialized sub sector of a cornerstone Canadian industry—one that gives Canada a prime opportunity to position itself within a critical global value chain.

Increasing Canada’s influence on the world stage, shoring up our sovereignty and keeping us safer, means deeper integration into high-value, complex economic roles. The future just doesn’t happen without our mining expertise. Playing a highly specialized role in this global value chain will boost economic productivity, enable increased trade diversification and make us safer and more innovative.

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Laurent Carbonneau is CCI's Director of Policy and Research. He can be reached at lcarbonneau@canadianinnovators.org. Claire Wilson is a Policy and Research Analyst at CCI. She can be reached at research@canadianinnovators.org. Mooseworks is the Council of Canadian Innovators' innovation policy newsletter. To get posts like this delivered to your inbox, sign up for CCI's newsletter here.