The Crawford Nickel Project is among more than 160 investments being showcased to global investors this week at the Canada Investment Summit , but the CEO of the company leading the development doesn’t expect a rush of money to flow into the mining sector right away. “Private capital is just getting comfortable again … in mining,” said Mark Selby, chief executive of Canada Nickel Co . “You’re not going to see three deals announced next week.” Selby said that the message from critical-mineral executives at the summit will be that the Canadian government is serious about issuing permits and clearing paths for project development. He is hopeful the summit, which has attracted scores of officials from pension and sovereign wealth funds around the world, will start the process of reacquainting institutional investors with the mining space after years of permitting delays and community opposition to projects led them to limit their mining investments to companies that already produce cash flow or shift altogether to oil and gas. “In three months and six months … (I think) you’re going to start to see more of these funds go: ‘Okay, yeah, you know what, we do need to think about allocating a little more capital (to earlier stage mining),” Selby said. “Hopefully the conversations that are going to happen in the sessions with government and these offshore investors will reinforce that message of we really do want your capital to come into Canada to help build these projects out… It’s the first step.” Even a small change in attitude toward mining could make a big difference. “These funds are so large that even a one or two percentage point shift in in asset allocation toward natural resources would feel like a tidal wave of capital coming at this sector,” Selby said. Canada Nickel Co.’s proposal to build a mine in the world’s second-largest nickel reserve near Timmins, Ont., ticks a lot of boxes for the federal government and could resonate with global investors that have sustainability built into their mandates and who gravitate toward investments that can be held over long time horizons. Large funds, including Singapore’s Temasek, whose chief executive, Dillan Pillay, met with Prime Minister Mark Carney on Monday, consider environmental, social and governance factors when they invest. By 2029, the Crawford Nickel Project mine, which cleared a federal impact assessment in July, will produce high-quality, low-carbon nickel needed for electric car batteries and “green” steel and alloys, which are used in infrastructure, transportation and aerospace. The mine is expected to operate for more than 40 years and use proprietary carbon mineralization technology to permanently store carbon dioxide. It has the backing of the Taykwa Tagamou Nation, which is an investor in the mine. Another investor in the Crawford Project, Samsung SDI, has an offtake option for the mine’s nickel. This type of arrangement can be appealing for institutional investors because it removes some risk. “They (investors) want a certain proportion of offtake,” Selby said. “But for us, nickel is an exchange-traded commodity, so it’s less sensitive to that type of requirement.” An added appeal for private money at some point is a plan to build a processing facility for the nickel. “I think part of the reason we were chosen for the MPO ( Major Projects Office ) was we are looking at doing that next-stage processing in Canada,” Selby said. “As soon as it leaves the country all of the subsequent value-add happens somewhere else.” Carney’s government, which is trying to reduce Canada’s dependence on the United States, has ambitions that the Crawford nickel project to serve as an anchor in the clean economy, and expects it to attract $5 billion in investment. Critical minerals are among the sectors being showcased to global investors at the investment summit alongside energy, technology and defence, and there is investor appetite among large funds, according to Raman Subramanian, managing director at New York-based MSCI, a data analytics and index company whose clients include asset managers, private-market investors, hedge funds and wealth managers. In a recent interview, he said the key to attracting those funds will be to show that Canada can offer something unique on a risk-adjusted basis among the countries with critical minerals such as Australia, Indonesia and China. Selby, who has been involved in nickel since the early 2000s when he joined Inco Ltd., said Canada does have an edge when it comes to the metal. It’s a much cleaner environmental option than Indonesia, he said, and has an energy cost advantage over Australia. “There’s lots of parts of Australia that have … relatively high electricity costs, and that’s a big part of getting mining projects off the ground, because you’re grinding up lots of rock,” he said. CRA to provide advanced tax rulings for companies looking to invest $1 billion or more, says OttawaOttawa approves Ontario nickel mine that could be western world’s largest Canada also has a relative labour cost advantage in the mining sector and an edge when it comes from infrastructure that already reaches projects like his, he said. Finally, there is already more mining capital in Australia vying for projects. If the Carney government’s commitments and the country’s relative strengths are successfully amplified during the summit, the money should start rolling in. “All of these initiatives over the last 18 months should really help Canada climb those internal rankings where capital gets allocated,” he said. “Once one investor goes, then other investors go. (They) don’t want to miss out.” • Email: bshecter@nationalpost.com
Canada Nickel CEO hopes investment summit restores lustre to early stage mining projects
