Essential metals and minerals, critical choices

The geopolitical environment for Canada’s mining sector has changed significantly over the past year. New risks and opportunities are emerging and will continue to evolve for the foreseeable future.

Massive investment is flowing into Canada’s mining sector, driven by high precious metal prices and growing demand for critical minerals. As geopolitical tensions rise, governments around the world are encouraging investment into mining and resource security (the G7’s recent pledge to invest $6.4 billion into 26 critical mineral projects across Canada serves as a prime example).

For a resource-rich nation like Canada, the current geopolitical environment globally represents both risks and opportunities for mining companies, investors and the wider economy. For example, increased investment into the sector could encourage market activity and consolidation, yet it could also lead to a hollowing out of the sector as foreign players snap up Canadian assets. Opportunities and risks will need to be carefully weighed.

Below, KPMG Canada’s mining leaders look at the top five geopolitical risks facing Canada’s mining sector today. Based on the recent global report Top geopolitical risks 2025 by KPMG International, this article puts the global trends into clear Canadian context and provides insights into how the leaders are making confident decisions amid uncertainty.

Canada’s mining sector is feeling the effects of the shifting trade relationship with the US and although most metals and minerals have bypassed the ongoing tariffs, the changes in trade dynamics are definitely reshaping the industry – for better and for worse.

On the upside, those focused on precious metals have seen prices skyrocket on the back of wider global economic and geopolitical uncertainty. Those trading in US dollars have benefited from a widening exchange rate and demand for critical minerals has brought renewed investor interest to assets previously considered marginal. Shareholders should also see an uplift in values thanks to increased investment into the critical minerals sector by the Canadian Government. However, the pace of change and uncertainty is making it difficult to make strategic decisions. 

The 2025 Federal Budget included several initiatives to encourage investment in Canadian critical mines. Yet, with demand for critical, base and precious metals rising rapidly, governments across the globe are now competing to attract investment. The tax and regulatory landscape is continuously changing.

The risk related to the evolving tax environment for Canada’s mining sector could be significant. With recent spikes in the price of precious metals, there is a risk that governments may decide to impose new excess profit taxes on mining operations. The introduction of the OECD’s Global Minimum Tax will almost certainly add a new compliance burden for multinational Canadian mining enterprises.

However, at the same time, the Federal and Provincial Governments are working hard to create the right tax and regulatory environment to attract new investment into the sector. The expansion of the Critical Mineral Exploration Tax Credit in the 2025 Federal budget could broaden exploration activities across the country. Further, the Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC) provides a strong incentive for capital investment in Canadian critical mineral mines.

The Federal Government’s recent commitment to fast-track infrastructure projects through the Major Projects Office is a promising step toward accelerating the development of new mines, with a stated goal of cutting timelines from roughly a decade to about five years. While this initiative is intended to reduce delays and bring essential mining operations into production more quickly, some critics contend that additional measures are necessary to ensure Canada remains competitive in the global mining landscape. A balanced approach is essential—streamlining approvals should be paired with robust environmental safeguards, Indigenous partnership, and community engagement to ensure that accelerating timelines does not compromise sustainability or social license.

Automation and AI are important topics on the mining agenda. On mining sites, automation is being integrated above and below the surface to improve efficiency, enhance safety, drive productivity and, in many cases, improve talent attraction and retention.

AI is also – slowly but surely – being integrated into mine operations and strategy. We are seeing AI being used to help improve designs, speed up development, drive predictive maintenance and reduce back-office complexity. But progress has been slow, and many executives worry they are missing opportunities.

Given the current geopolitical environment, a bigger risk may be that of cybersecurity. Integrating legacy machines and processes with AI can create unexpected vulnerabilities, as do decentralized operating technologies. The trick will be to embrace the sector’s experience managing remote, dispersed and decentralized operations to properly integrate new technologies while maintaining the right controls.

Automation and AI are important topics on the mining agenda. On mining sites, automation is being integrated above and below the surface to improve efficiency, enhance safety, drive productivity and, in many cases, improve talent attraction and retention.

AI is also – slowly but surely – being integrated into mine operations and strategy. We are seeing AI being used to help improve designs, speed up development, drive predictive maintenance and reduce back-office complexity. But progress has been slow, and many executives worry they are missing opportunities.

Given the current geopolitical environment, a bigger risk may be that of cybersecurity. Integrating legacy machines and processes with AI can create unexpected vulnerabilities, as do decentralized operating technologies. The trick will be to embrace the sector’s experience managing remote, dispersed and decentralized operations to properly integrate new technologies while maintaining the right controls.

Against a backdrop of ongoing geopolitical uncertainty, supply chain disruptions, security concerns and resource nationalism, the risk of threats to the mining value chain are rising. Canada’s focus is on securing its supply chains while remaining attractive to foreign direct investment.

So, on the one hand, while other markets are ‘friendshoring’ and ‘nearshoring’, Canadian mining organizations are being encouraged to buy Canadian – with the intention of creating both economic and security benefits for Canada’s mining sector.

On the other hand, Canada is also seeking to position itself as a reliable global resource partner. Canada’s rule of law, security and political stability are increasingly attractive in times of uncertainty – particularly for critical minerals like lithium, nickel and uranium that underpin future growth.

Additionally, geopolitically-motivated changes to supply chains are also creating new tensions – between time, cost, resilience and environmental sustainability. Balancing these priorities while maintaining security of supply will be challenging.

As the global battle for talent rages, many of Canada’s mining organizations are struggling to attract and retain key talent. Yet recent geopolitical events and trends are creating new opportunities that may help close the gap.

For example, many believe that recent US immigration policy changes could turn the tide in Canada’s favour. Technology will also play a key role, both to reduce resource requirements and as a tool to attract new grads.

While this risk will not be new to Canada’s mining leaders, there are signs that the current geopolitical environment is adding new pressures to talent mobility, attraction and retention. Keeping this risk at the top of the agenda will be critical to long-term success.

Mining has long treated geopolitics as a priority, but today’s landscape demands a wider lens: all stakeholders in Canada’s mining ecosystem—especially executives—should broaden their assessment to rethink geopolitical risk, what it means for their organizations, and how they will address future risks to drive sustainable outcomes over the long term.

KPMG Canada understands the crucial role the mining sector plays in shaping our future. We believe the industry is well-positioned to make a significant impact. We're here to support you in addressing these challenges and working towards a sustainable and responsible future, together.