The May Twenty Four: Newfoundland and Labrador’s tilt for critical minerals

Like every other province, Newfoundland and Labrador has held — and continues to hold — no small role in the strength of Canada’s C$66-billion-plus mining sector. But it wasn’t always that way.

Tilt Cove

Though archaeological evidence points to the existence of ‘organised’ mining thousands of years ago, it wasn’t until the 1800s that a concerted effort was made to understand what, exactly, the region’s geological structures could offer.

It began with the English geologist Joseph Jukes who, in the 1830s and 1840s, noted many of the province’s mineralogical and geological features. Shortly thereafter, global interest in resource definition began to grow, and in 1864 the first systematic mapping was undertaken by Alexander Murray, who would go on to become the inaugural director of the Geological Survey of Newfoundland and Labrador.

It was also in 1864 that the province’s first major mining operation was launched at Tilt Cove. Large deposits of copper, along with high traces of gold, had been discovered in 1857, and until its closure in 1917 — due to international market and military pressures, plus declining ore grades — the mine was one of the world’s largest producers of copper. Mining activities were eventually restarted in 1957 after the Maritime Mining Company identified additional resources, but ceased in 1967.

The operations at Tilt Cove came to represent a turning point for Newfoundland and Labrador’s mining industry, ushering in a period of intense resource exploitation. Large quantities of copper and pyrite were identified at Bett’s Cove, located southwest of Tilt Cove, while in Little Bay tens of thousands of tonnes of copper and almost 200,000 grams of gold were mined intermittently from 1878 to 1968.

Now, Newfoundland and Labrador is home to a list of 34 critical minerals, according to the provincial government. In 2022, some 11 mines across Newfoundland and Labrador produced roughly $5.4 billion in mineral shipments and employed more than 8,000 people. About $243 million was spent on exploration alone.

The world’s ninth most-attractive region for investment in 2023

According to the Fraser Institute’s Annual Survey of Mining Companies 2023, Newfoundland and Labrador ranked ninth out of 86 as the world’s most attractive region for investment — behind Saskatchewan in third, Québec in fifth, and Manitoba in sixth. Utah and Nevada took first and second, while Western Australia took fourth, Arizona seventh, the Northern Territory eighth, and Ontario 10th.

The overall investment attractiveness of a region is calculated by combining the ‘best practices mineral potential’ index, which rates regions based on their geologic attractiveness, and the ‘policy perception’ index (PPI), a composite index that measures the effects of government policy on attitudes toward exploration investment. 

More broadly, Newfoundland and Labrador ranked 11th for policy perception, fifth for its legal system, seventh for its political stability, and eighth for its geological database.

However, the province was found to be less compelling in other areas, ranking 18th for both its mineral potential and its taxation regime, 25th for both security and uncertainty over disputed land claims, 27th for its infrastructure, 15th for trade barriers, and 20th for the availability of skills and labour.

“Newfoundland and Labrador saw its PPI score decrease by almost eight points this year, which moved the province down in the ranking to 11th spot (of 86) after ranking fifth out of 62 in 2022,” the survey said.

“This year” — that is, 2023 — “miners were increasingly concerned about the uncertainty concerning regulatory duplication (+26 points), protected areas (+22 points), and uncertainty regarding disputed land claims (+17 points).”

In Newfoundland and Labrador, some 43% of survey respondents said they received necessary permits in less than two months. In British Columbia, for example, just 28% of respondents said this was the case. Similarly, Newfoundland and Labrador was the second-best performing jurisdiction in Canada for permitting transparency, with 86% saying it encourages — or at least is not a deterrent to — investment.

However, not all feedback was positive. 

“Royalties from mining operations are not being properly invested in improving community development conditions,” the president of an unnamed exploration company said.

“Royalties should be shared with the local municipalities and regional stakeholders.”

Canada’s critical minerals champion?

In November last year, Andrew Parsons, Newfoundland and Labrador’s Minister of Industry, Energy and Technology, unveiled the province’s Critical Minerals Plan. 

Designed to unlock the full potential of the region’s critical minerals resources, it pledged $3 million to support the collection, processing and availability of public geoscience data, and another $1.3 million to fund the Junior Exploration Assistance Program, which offers financial support for explorers in pursuit of critical minerals, including:

While the list of 34 minerals includes cornerstone commodities like nickel, copper, and cobalt, it notably extends to high-grade, low-impurity iron ore for its “advantaged position” in reducing greenhouse gas emissions in steel manufacturing and the potential for further value-added activity as a green steel input.

“Critical minerals are an essential component of many renewable energy and clean technology applications, and are vital to building the province’s green and digital economy,” Parsons said last year. 

“Our government was committed to developing a provincial Critical Minerals Plan that is inclusive and reflective of the needs of our people and communities, while establishing policy frameworks that will attract investments to develop our resource potential.”

Ed Moriarty, then-Executive Director of Mining Industry NL — the primary representative for Newfoundland and Labrador’s mineral industry — likewise highlighted the province’s unique position to capitalise on its broad access to critical minerals.

“From investments in geoscience and new technologies to direct support for exploration, the province’s Critical Mineral Strategy supports our members’ pursuit of new discoveries, and the expansion of existing critical and green mining assets,” he said.

Players big and small

One of the biggest players in Newfoundland and Labrador’s mining and minerals sector is Rio de Janeiro-based Vale S.A. (NYSE:VALE), which boasts an integrated mining, milling and processing operation. Nickel concentrate is shipped from its Voisey’s Bay Mine southwest of Nain — the northernmost settlement in Newfoundland and Labrador — to the Long Harbour Processing Plant (LHPP) for refining into nickel rounds and associated copper and cobalt products.

Similarly prominent is the Iron Ore Company of Canada — a joint venture between Rio Tinto (ASX:RIO), Mitsubishi (TYO:8058), and the Labrador Iron Ore Royalty Income Corporation (TSX:LIF). In addition to a five-pit mine near Labrador City — including a concentrator and a pelletising plant — the company operates the 418km-long Québec North Shore and Labrador Railway, which connects its operations in Labrador to company-owned port facilities in Sept-Iles.

Also on the iron ore front is Tata Steel Minerals Canada, which was incorporated in 2010 as a partnership between Mumbai-based Tata Steel (NSE:TATASTEEL) and the Government of Québec. Headquartered in Montreal, the company operates a high-grade mine in the Menihek area of northwestern Labrador, where numerous hematite deposits extend more than 30km.

Tacora’s Scully Mine

Likewise, privately held Tacora Resources owns the Scully Mine near Wabush, which includes iron ore processing facilities. After starting operations in 1965, the mine was closed down in 2014 following the restructuring of Cliff Natural Resources. Tacora purchased the Scully Mine in 2017, and production resumed in 2019.

However, Tacora obtained creditor protection in October 2023, citing a volatile market, forest fires, and unexpected maintenance costs as contributing factors that led to a dire year financially. In February, the company lined up a group of investors to breathe new life into the mine, which was swiftly opposed by major shareholder Cargill for its “rushed process”, according to court filings. The matter was due to be heard in April.

Less advanced are those like Maritime Resources (TSX:MAE), which — with more than 450km2 of mineral claims and mining leases — is focused on gold exploration and development in Newfoundland and Labrador’s Baie Verte district. Its assets include the historical Hammerdown Gold Mine, the Nugget Pond Gold Plant, and a number of other exploration projects across the region.

In 2023, Maritime acquired the Point Rousse Project — including the fully permitted Pine Cove mill — from Signal Gold (TSX:SGNL). A precious metals clean-up program was then launched at the mill, which resulted in the pouring of a gold doré bar measuring 281.1 ounces for total proceeds of $745,158.

Vancouver-based Calibre Mining (TSX:CXB) owns the Valentine Gold Mine in central Newfoundland and Labrador, roughly 80km south-west of the Millertown and Buchans mining communities. With an estimated 3.6 million ounces in the ground, Valentine is thought to be the largest undeveloped gold resource in Atlantic Canada.

Drilling at Matador’s Cape Ray Gold Project

Other juniors include Matador Mining (ASX:MZZ) with its Cape Ray and Hermitage gold projects, and Canterra Minerals (TSX-V:CTM) which recently acquired a portfolio of critical and precious metals from Buchans Resources, a private company with other nickel, copper and cobalt assets in Newfoundland and Labrador.

This, of course, is not an exhaustive list. But it’s one that hints at the importance of Newfoundland and Labrador’s mining sector, even if the province has lagged behind more established regions like Western Australia and Nevada. And with critical minerals continuing to take an expanding role in the global economy, Newfoundland and Labrador could see itself become a hotbed for investment in the years to come.

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Images: Newfound News, Government of Newfoundland and Labrador, Tacora Resources, Matador Mining
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Written By Oliver Gray
Originally from Perth, Oliver has a keen interest long-form journalism. He has written for a number of publications and was most recently Contributing Editor of The Market Herald’s opinion section, Art of the Essay.