What has activity been like in Canada for DRA Global recently?

We have continued to be very busy in Canada in 2024. Our sophisticated and systematic approach to opportunity identification and pursuit means we are constantly monitoring asset development projects across the country. Copper and gold projects have remained very active due to the positive market conditions and, whilst lithium continues to be active, the drop in price over recent years has slowed down the frenzied pace at which it was once progressing. This is unfortunate because, despite the number of analysts and predictors of demand for lithium, we are still at the behest of short-term pricing both in terms of production and financing. After many years of studies and discussions, Canada only has one producing lithium mine.

We have seen great support from Minister Pirie and also the federal government for critical minerals particularly in upstream sectors. Federal funding downstream is present but not at the rate needed to align with projected battery supply, nor for Ontario to become a green energy and EV hub. We cannot afford to be hesitant in our funding of the critical minerals space as competitors in other countries are progressing rapidly towards being the global suppliers and processors of lithium due to their higher levels of foresight and persistence.

Are issues with meeting project deadlines and budgets particularly prevalent in Ontario?

The failure of projects due to going over budget or failure to execute on schedule is a global issue and not unique to Ontario or Canada. Companies in Ontario admittedly have struggled to reach nameplate capacity on budget or on time which continues to make raising capital a challenge. The methodology mining companies follow to develop their assets from planning and studies to financing is a concern due to its repeated failings, but this is why at DRA Global we participated in the forming of the CIM Capital Projects Symposium to bring technical professionals, the legal sector, finance companies, and construction and project management companies together to discuss, debate and develop solutions to poor project performance. Hopefully we can address failures to invest properly during the project development phase leading to a snowball that inhibits reaching on-schedule start-ups and nameplate capacity.

What is the goal of the Capital Projects Symposium?

One area we are focusing on is the contracting models. As an industry we need to develop contracting models that drive collaboration and align the interests of the mining company and the contractors. Currently, a primary risk mitigation tactic has been to try and transfer the risk from mine owners to contractors through legal contracts. At the end of the day, the owner owns the risk and paper-based risk mitigation has not led to better outcomes. With these traditional contracts, when a problem arose, the contractor would manage the project to the written agreement rather than solve the problem effectively, especially in EPC fixed-price contracts. Often, this would end up with blame shifting from party to party ending in litigation that is harmful and expensive to all involved. What we at DRA are trying to achieve is an integrated team approach with an agreement between everyone involved in the mine under one project manager. Ultimately, this will improve collaboration and aid mines in solving their issues quicker and more efficiently. As an industry, if we want to move to improve things such as ESG and decarbonization, an important first step is collaboration and trust.

What impact will digitization have on mining in the coming years?

It seems very popular to believe digitization is what will save mining, however, as an example, Rosemount Instrumentation introduced their first digital transmitter in 1985, meaning as an industry we have been going digital for almost 40 years. It is not a lack of digitization killing projects but that is not to say it will not help. One area for significant impact is in the production of early-stage studies where with the help of AI, we can conduct PEAs faster and “data mine” our internal and external databases to reduce timelines. Digitalization will not ultimately save the day; the correct people and equipment working efficiently will.