High metal prices and green tech a boon for Ontario mining, says industry

High metal prices and a push to move away from fossil fuels for transportation have benefited both junior and larger mining companies in northeastern Ontario.

Paul Fowler, senior vice-president of junior miner Magna Mining, said the high price of nickel makes it viable for the company to reopen the Shakespeare mine near Espanola, Ont.

He said the company did a feasibility study at the mine in January, in which it estimated the nickel deposit's value at $8.50 US per pound, and again at a nickel price of $12 per pound.

"The value of our project increased by over 100 per cent in dollar terms or $250 million as the nickel price increased from $8.50 to $12," Fowler said.

"So the impact on our project is huge. It makes the economics excellent and we fully expect to be proceeding with it as soon as we can."

As of Thursday the price of nickel was around $14.80 US per pound.

Fowler said the high price was due in part to growing demand for nickel for lithium ion batteries, which power everything from electric vehicles to cell phones, and Russia's invasion of Ukraine and the global sanctions that followed.

He said Russia accounts for around 10 per cent of global nickel production and up to 20 per cent of Class 1 nickel production, which is of a higher purity, and used for electric vehicle batteries.

Peter Xavier, vice-president of mining giant Glencore's Sudbury Integrated Nickel Operations, said a higher nickel price helps make the business case when the company has to go deeper underground to mine the metal.

The company's upcoming Onaping Depth Project, expected to start production in 2025, will be one of the world's deepest mines at a depth of 2,600 metres.

Xavier said growing global demand for metals like nickel, lithium and platinum have also benefited the company and its Sudbury operations.

"For us in the industry, you know, we always knew that we were critically important," he said. "And we produce the things we produce for a reason; because the world needs it and there's a certain purpose behind that."

Xavier said companies like Glencore are in regular contact with auto manufacturers to help meet their needs as they build more electric vehicles.

Viable projects

Gold producers have also benefited from higher prices more recently.

Quentin Yarie, president and CEO of junior miner Red Pine Exploration, said his company hopes to develop a gold deposit near Wawa, Ont., now that the price has surpassed $1,900 US per ounce

"The economics of many projects that weren't economic before became far more economic and of greater interest to exploration companies," he said.

Ontario Mining Association President Chris Hodgson said the opportunities for Ontario's mining industry are at a high point thanks to efforts to electrify the economy and boost electric vehicle production around the world.

"We've got, you know, a $10 billion industry in Ontario right now," he said. "But the potential is huge as you see the world switching from fossil fuels to electrification, they need the materials that we produce in Sudbury and Ontario."

Hodgson said Ontario's new critical minerals strategy will also provide more clarity for the mining industry and stakeholders, such as government and First Nations partners.

"Don't underestimate that. That's a huge advantage," he said.

"It entails that we have clear rules, honestly applied and we attract investment from all over the world."