Plans to build mineral processing plants in Timmins by 2027 'a bit of a stretch,' says expert

Laurentian University professor Jean-Charles Cachon isn't convinced Canada Nickel will succeed in its plans to build two new processing facilities and begin production by 2027. 

"The company has yet to produce any profits," he said. "At this point in time it is a small company that has expenses related to exploration." 

Canada Nickel is currently advancing the Crawford nickel project, a proposed open-pit nickel-cobalt mine located some 43 kilometres north of Timmins, Ont.

It has not yet obtained the permits it needs to launch into production there, but is hoping to complete that step over the next two years. 

On Thursday, the company said that, on top of its mine development project, it plans to develop a nickel processing plant as well as a stainless-steel and alloy production facility in Timmins over the next three years.

CEO Mark Selby said these are to provide a 'missing link' in Ontario's plans to build a full-fledged electric vehicle industry.

"Currently Canada Nickel has some investment of about $18 million from Samsung's division for electrical vehicle batteries, but that is nowhere near the funding required for that type of project," said Cachon. 

A spokesperson for Canada Nickel says the company raised over $53 million in January, thanks to investments from Anglo American and Agnico Eagle, in addition to Samsung.

These three companies now own more than 25 per cent of Canada Nickel.

But Cachon says building a new mine in Ontario right now comes with a price tag of about $1 billion, and building new processing facilities would cost about the same. 

In the announcement, Selby said the company is expecting the majority of the funding for the project to come from various government sources. 

"We have applied to several federal and provincial critical mineral/economic development funding programs, to which we expect to have decisions confirmed in the first half in 2024 to fund the current phase of engineering studies," said Selby in a follow-up email from CBC. 

"Between expected government funding and our industry partners, we anticipate we will obtain the equity capital required to build these projects." 

A strategy to attract investors

Although Ontario's Minister of Mines and Timmins MPP George Pirie was present at the announcement Thursday and voiced support for the project, it is not clear if the provincial government will eventually pitch in to lift the project off the ground. 

Dylan Moore, a spokesperson for Pirie's office, says "Ontario has not received an official funding ask from Canada Nickel at this time" but is "always willing to review proposals from companies." 

But Cachon says the Ford government's commitment to mining projects has, so far, "been mainly verbal. I don't think we've seen actual money being delivered." 

Canada Nickel's announcement of plans for processing facilities without having any confirmed funding is a strategy, believes Cachon. 

"If you have a good project – which is the case for Canada Nickel – you need to get into public relations, and basically try to make yourself known to find at least one significant private investor," he said. 

In its pitch, Canada Nickel says its projects will have a zero carbon footprint, thanks to carbon capture and storage techniques. 

Cachon is slightly skeptical the company can make due on that promise.

"There are costs attached to that, and they haven't even chosen an engineering firm to deal with all these issues. I think the project is basically at the embryo level at this point," he said.