For Interior Secretary, a post that oversees the management and conservation of federal lands in the US, Trump announced Doug Burgum, governor of North Dakota – the third largest oil producing state in the country – as his choice. Burgum will also lead a newly created National Energy Council, which will focus on increasing US energy supplies by better coordinating federal agencies and adding capacity to the electricity grid.
Deregulation and speeding up permitting were key policies for Trump during his first term, and Frank Mariage, a mining-focused partner at law firm Fasken, says Trump’s picks show he considers that unfinished business.
Trump 2.0
“When Trump 1.0 came in, he put in through executive orders a number of guidelines to start streamlining the permitting process. Most of those were repealed when Biden came in,” Mariage says.
“So Trump is going to be looking to obviously put those back into force, and these nominations are a clear signal that that’s where they’re headed.”
While the focus of easing environmental regulations has been on fossil fuels, mining will also benefit, says Patricia Mohr, a former Scotiabank vice-president and economist. That will have spill-on effects in Canada, where permitting is not quite as slow as the United States, but still excruciating.
“If they do that south of the border, we’re going to have to finally speed up our permitting in Canada. Otherwise, we’re going to get left behind,” says Mohr, who also sits on the board of Horizon Copper (TSXV: HCU) and is also the former editor of Capitalight Research’s critical minerals-focused newsletter.
“It’s going to create pressure on us because, in British Columbia alone, there are at least six late-stage mining projects that could actually be financed and get going. These are industrial mines, not gold mines. These things exist in BC, but they need to really be pushed by government to get going.”
Mohr admits some commodity prices aren’t cooperating – nickel for example – but says copper demand has held up despite weak growth in China, which accounts for over half of global demand.
The Prospectors & Developers Association of Canada (PDAC), which advocates for improvements to the regulatory framework, agrees reforms are sorely needed to capitalize on the nation’s mineral potential.
“While there is uncertainty around potential policy changes in the US, any moves to streamline permitting there could further heighten competitive pressures on Canada,” Jeff Killeen, PDAC’s director, policy and programs, said in an email to The Northern Miner. “We believe changes are urgently needed, including harmonizing federal and provincial approvals to eliminate duplication, setting clear and predictable timelines for permitting, and ensuring regulatory bodies have the resources to manage applications efficiently.”
EV adoption
As Trump unveils his picks for key posts, much of the media focus has been on Trump’s support for fossil fuels, a reversal of Biden’s focus on fighting climate change and speeding the energy transition through the Inflation Reduction Act and other legislation. However, Trump also supports domestic production of critical minerals to reduce reliance on China, and has said that US copper and lithium production should be maximized.
Most analysts don’t see Trump repealing Biden’s Inflation Reduction Act as he’s promised, but he’s seen as likely to remove its incentives for electric vehicles. Mohr says such moves are likely to slow EV adoption in the US.
“However, the adoption in the United States so far has been quite slow already, and so I don’t really think his policy will have that much impact,” she said. “I do think that it will be very difficult to slow the interest around the world in decarbonization, which means that you’re still going to have a lot of interest in renewable energy.”
Artificial intelligence
Trump says he wants to make the US a leader in artificial intelligence (AI), which is expected to require enormous amounts of power.
According to International Energy Agency figures, data centres, cryptocurrencies and AI consumed 460 terawatt hours of electricity in 2022. It projects that demand will more than double to 1,000 terawatt hours by 2026, just four years later.
Unlike EV enthusiasm and projected demand over the last several years, which has now deflated, taking lithium prices with it, Mohr says the expected power demands of AI aren’t being overhyped.
That means nuclear power, which tech giants Microsoft and Amazon are planning to tap to power their data centres, will be a winner under Trump. So will Canada’s uranium sector, which is the world’s second largest.
“The interest in the nuclear industry and in uranium has broad bipartisan support in the US Congress,” Mohr said. “I’m not sure that it will be positively impacted by Mr. Trump’s presidency, but it won’t be negatively impacted.”
Tax impact
Mariage says Canada will also have to consider how to attract investment if Trump follows through with pledges to slash taxes.
“The extractive industry is very capital intense and it’s very risky, so everybody that’s in the business knows that high risk needs high reward.”
In Canada, the federal government’s sent contradictory signals on investment, with the capital gains tax hike this year working counter to its plans to boost critical minerals supply chain and manufacturing, announced in late 2022.
“They’re ‘rah rah’ on critical minerals but at the same time they’re making it harder for investment. At the same time, we’re talking about streamlining the permitting process, but we’re not necessarily doing anything about it.”
While the federal government has pushed hard on the manufacturing side of the critical minerals supply chain, granting billions in funding for new EV plants and battery manufacturing, it hasn’t done enough to ensure those plants can source supply locally, he said.
Based on Trump’s first term, when he placed duties on aluminum and steel that didn’t initially give Canada special treatment and reopened the North American Free Trade Agreement, Canada can’t necessarily count on special treatment on tariffs.
“I’d like to think we have guaranteed co-operation, since they’re our biggest neighbour and 35 of the states in the US, their principal customer is Canada,” Mariage said. “But let’s not forget what happened in Trump 1.0.”
With potentially radical changes coming to the US, mining powerhouse Canada will have to step up its game to keep that reputation.
“There’s going to be some pretty bold moves in the US for the extractive industry that will attract investment,” Mariage says. “If we don’t do the same, then people are going to be looking south of the border for investments instead of north of the border.”
