With the global demand for critical and rare earth minerals rising for use in a variety of products including batteries, cell phones, energy storage cells and electric vehicles, Alberta’s Bill 82: Mineral Resource Development Act (the “Act”) was recently proclaimed into force. Alberta also concurrently released a strategy and action plan for developing the provincial minerals and mineral products industry entitled Renewing Alberta’s mineral future, a strategy to –re-energize Alberta’s minerals sector (the “Plan”). The Act and the Plan set out a vision and concrete steps for Alberta to become a preferred producer and supplier of minerals and mineral products.
Alberta’s geology is favorable for a number of minerals key to the production of batteries, electric-powered vehicles and energy storage including lithium, copper, vanadium, rare earths and uranium. Fort Saskatchewan, Alberta is also home to one of Canada’s three nickel refineries in Canada. With the Act and the Plan, Alberta is looking for ways to diversify its economy, take advantage of battery minerals as a new and exciting industry sector, and actively contribute to the global energy transformation.
Industry organizations including the Battery Metals Association of Canada have highlighted the need for a solutions based regulatory approach that streamlines regulatory approvals in order to advance the battery metals industry and supply chain. The previous minerals strategy for the Province was prepared nearly 20 years ago. The Plan and Act are intended to create a refreshed regulatory environment for responsible mineral exploration, extraction, processing and recycling in the Province.
The Plan also generally aligns with the Canadian Minerals and Metals Plan (the “Canadian Plan”). The Canadian Plan was developed by federal, provincial and territorial governments, which seek to sustain Canada’s position as a global leader in the minerals and metals industry. Both the Plan and the Canadian Plan attempt to capitalize on opportunities for home-grown development in the rapidly-evolving battery metals and minerals sector.
The Plan identifies six key areas of focus and lays out short-term, intermediate and long-term goals:
- Increase Public Geoscience: Alberta’s metallic minerals remain largely unexplored and unmapped. The Province intends to correct this knowledge gap by enhancing the public geological knowledge base of its mineral resource potential. One means of achieving this objective is to build an inventory of minerals through tracking and collecting mineral information, including through a continuation of the Alberta Geological Survey. A publicly available and easily accessible base of knowledge will reduce exploration risk for prospectors and developers. It will also equip government, industry, land owners and other relevant stakeholders with more information to make better informed land use decisions.
- Enhance the Fiscal and Regulatory Environment: Alberta aims to improve investor confidence and attract investment in the minerals sector by developing a clear and predictable regulatory regime. A transparent, outcome-based and risk-proportionate regime will create clear accountabilities for the allocation and management of liabilities throughout the life cycle of mineral resource development.
- Promote Responsible Development: Alberta aims to strike a balance between granting more flexibility to industry stakeholders to invest and acquire mineral rights, while continuing to ensure that the Province’s stringent environmental and health and safety standards continue to be upheld. The Province intends to implement strict regulatory regimes for remediation and rehabilitation of mineral projects in order to avoid recent issues experienced with orphaned oil and gas developments.
- Advance Opportunities for Indigenous Peoples: Alberta seeks to boost the participation of Indigenous groups in mineral projects and promote opportunities for Indigenous-led opportunities along the mineral supply and value chains.
- Develop Public Awareness and a Skilled Workforce: With Alberta’s vast experience and expertise in the oil and gas and coal sectors, the Province benefits from an existing labour force with pertinent skills in the extractive industries. Alberta aims to support the development of a skilled workforce in the minerals sector by growing public awareness of employment and entrepreneurial opportunities in the sector. Developing a thriving minerals sector is also an important component of Alberta’s Economic Recovery Plan. Increased employment opportunities will provide economic benefits to communities detrimentally impacted by the COVID-19 pandemic and the development cycles of other resource sectors.
- Promote Innovation and Industrial Development: Through its experience and expertise in the coal and oil and gas sector, Alberta has a global reputation for geological knowledge and geoscience expertise. Alberta aims to expand the scientific and industrial capacity within the Province for mineral production by encouraging home-grown innovation and the development and adoption of emerging technologies. As an example, direct lithium extraction is a technology being developed and employed to access Alberta’s lithium-brine potential in many of the same reservoirs as existing oil and gas resources.
To enhance the regulatory environment in the Province and put into action the Plan’s second key area of focus (summarized above), the Government of Alberta recently enacted the Act. The Act was introduced on November 4, 2021 and received quick passage to royal asset on December 2, 2021.
The Act applies to all mineral resource development activities in Alberta, regardless of whether or not such developments commenced before or after the Act came into force. The Act also includes a number of related amendments to other acts relevant to the minerals industry including, among others, the Environmental Protection and Enhancement Act, the Natural Resources Conservation Board Act, and the Responsible Energy Development Act.
Prior to the Act, the regulation of Alberta’s mineral resources fell under the purview of multiple agencies and departments. Now, the Alberta Energy Regulator (the “AER”) has been granted the power to carry out any order or direction it considers necessary to further the purposes of the Act. The powers vested in the AER are similar to those provided to the AER with respect to the regulation of the oil and gas sector. Of note is the ability of the AER is designate wells previously established under the Geothermal Resource Development Act and the Oil and Gas Conservation Act as wells under this Act. This power could open the door for the re-use and repurposing of Alberta’s existing network of wells, including the inventory currently held by the Orphan Well Association.
The Act will consolidate and centralize the AER’s regulatory oversight role over the entire mineral lifecycle from exploration to remediation. This consolidation and centralization is expected to provide greater regulatory certainty and predictability for investors, developers and other industry stakeholders.
The Act represents a concrete initial step for the Province to achieve its vision of becoming a preferred producer and supplier of minerals and mineral products.
McCarthy Tétrault LLP is a sponsor of the Battery Metals Association of Canada. McCarthy Tétrault will continue to follow developments in the Alberta minerals and mineral products industry. Our Power Group and Global Metals & Mining Group provide leading advice on national and international power and mining projects, offering our clients a 360 degree view of the power and mining industries. For further information, please contact your McCarthy Tétrault trusted advisor or one of the authors.