Thanks to all the talk of the urgent need for critical minerals and Canada’s plentiful resources to meet that need, the Canadian mining sector is eager to put a shovel in the ground. However, a lengthy and complex permitting process ahead for any large new mine in Canada can be daunting. The federal impact assessment (IA) process under the Impact Assessment Act (IAA) can take four to six years to complete, partly because of the need for multi-year baseline data and modelling to support the robust impact effects analysis that lies ahead. With additional time needed to permit, design and build a mine site, the entire process can take at least 10 years before a mine is built and operational.
This protracted timeframe has mining companies and investors thinking more strategically about how to best pursue their mining projects. For example, some mining companies are starting to revisit and update their existing preliminary economic assessment and pre-feasibility/feasibility studies to re-evaluate the technical, financial and operational aspects of a proposed mining project to determine if a smaller mine plan would still be economically viable—one that would not trigger the requirements to prepare an IA. Factors like ore grade, deposit size, infrastructure requirements, market demand and regulatory considerations are all elements that determine whether the project is economically feasible and worth pursuing. While there are a number of other federal regulatory triggers when evaluating whether to go big or go small, the mine’s ore production capacity is front and centre.
While this is a fast-changing picture, as of June 2024, the need for a federal IA is triggered for new mines with a planned ore production capacity exceeding 5,000 tonnes per day as defined in the Project List under the IAA. However, just because a new mining project’s ore production capacity is less than 5,000 tonnes per day, it does not necessarily mean there are no impact assessment obligations under provincial or territorial environmental legislation. What that means, depending on the jurisdiction, is that the impact assessments can take significantly less time—more like two to three years—to obtain approval. Of course, mine-specific permitting is still required under this scenario. All in all, in the absence of federal IAA requirements, getting a mine built and operational could take as little as five to six years.
So, is it good practice for miners to just plan to stay under that 5,000-tonne-per-day limit?
A smaller, operational mine may be more palatable to developers than a large mine, pending a lengthy IA and permitting process. Recent experience working with mining companies shows that increasingly more miners are considering viable mine plan options that keep their ore production capacity under the 5,000-tonne-per-day threshold. The following are potential advantages of permitting a smaller mine under this scenario:
Reduced time and costs. Smaller mines typically have more straightforward infrastructure requirements and fewer environmental impacts. Obtaining permits for smaller projects involves less bureaucracy and shorter approval timelines. This translates to lower permitting costs and faster project initiation.
Early revenue generation. Smaller mines can start production sooner, allowing companies to generate revenue earlier. This is especially crucial for junior mining companies or those with limited financial resources. Delaying large mine development means postponing revenue streams.
Community and stakeholder relations. Smaller mines often have a smaller footprint and may face less opposition from local communities and Indigenous groups. Swift permitting can help maintain positive relationships with stakeholders and minimize conflicts.
Adaptability and flexibility. Smaller projects are more agile and can adapt to changing market conditions. If commodity prices rise, a smaller mine can quickly ramp up production. Conversely, if market dynamics shift, it is easier to scale down or suspend operations.
Exploration and feasibility. Permitting a smaller mine allows companies to explore the resource potential and conduct feasibility studies. This information can inform decisions about larger-scale projects. It is a strategic step towards understanding the deposit before committing to a massive investment.
Regardless of whether the mine is big or small, value-added activities that mining companies can do upfront to minimize the risk of lengthy permitting timelines include:
A regulatory roadmap. At the earliest planning stages, determine the federal and provincial triggers involved in each permit required. Develop a timeline and steps to be followed from a regulatory viewpoint. This should include the costs involved, the timing of each regulatory obligation and who will do the work.
Early engagement with Indigenous communities. Build good relations with local stakeholders. Increasingly, Indigenous communities are concerned about the impacts of mining on water supplies.
Invest in quality submissions. Make sure that environmental and other studies are above reproach—because stakeholders and regulators who find that data are missing or erroneous may insist on a time-consuming rework of the information, causing extra expense and delays.
In summary, the faster permitting of smaller mines provides operational agility, cost savings and the opportunity for early revenue, making smaller mines an attractive option for mining companies. Canada’s environmental, social and economic review process is challenging, but investment upfront pays for fewer objections and a more reliable timeline for developing a mine.
Piero Amodeo is the Canadian mining sector leader at GHD Engineering and Environmental Services.
