Going nuclear: Zero-emissions mining in a material world

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Canada’s energy transition has material issues. The climate change impact of energy materials is prominent among them. Canada’s mining industry can remedy this challenge with the adoption of low-carbon energy sources to power production. But as mining firms venture further afield in search of untapped resources, pragmatic options in these northern, remote and off-grid terrains, are limited. Nuclear energy is a transformative alternative. The ability of very small modular nuclear reactors (vSMRs) to produce non-intermittent, zero-emissions electricity and heat, makes a compelling case for remote mines.

Lithium, copper, cobalt, nickel, rare earth metals and others. The supply security of these energy materials for the manufacture of clean energy technologies (such as electric vehicles, batteries and wind turbines), will prove critical as Canada’s energy transition unfolds. Governments understand the strategic importance of this issue. Canada and The United States finalized a Joint Action Plan on Critical Minerals Collaboration at the start of the year. More recently, Saskatchewan earmarked over $30 million towards Canada’s first rare earth metal processing facility. And in Ontario, a $1.8 billion electric vehicle assembly plant deal was reached – with the possibility of sourcing materials for battery manufacturing in Canada.

The carbon footprint of these energy materials is as important as the economic opportunities they present. Northern, remote and off-grid mines will have an increased presence in Canada’s mining future. These mines are challenged by a dependence on diesel generators for their electricity needs, resulting in high energy costs and carbon emissions. For context, costs range from about $180/MWh to $600/MWh. vSMRs can address these energy needs with the twin benefits of zero-emissions and economic dividends.

The Conference Board of Canada has estimated the economic impact of deploying four 5MW vSMR units at a new remote mine in northern Ontario to be $659 million in GDP, $460 million in wages and $235 million in taxes for the province. These economic impacts stem from the project development, manufacturing, construction, operation and decommissioning of the reactors. For Canada as a whole, $877 million in GDP, $573 million in wages and $310 million in taxes could be created. There are also jobs. Most jobs are created in the vSMRs’ 20-year operation phase – highlighting the longevity of these benefits. On average, almost 200 jobs per year can be created in Ontario during the operation phase. The equivalent estimate for Canada is 282 jobs per year.

vSMRs have challenges of their own. The technology is still emerging, costs are uncertain, and no plants have been built in Canada. Mines with short operational lives of five to ten years are problematic for their business case. Additionally, vSMRs produce radioactive uranium fuel waste. On-site waste management, social acceptance by local communities, and the logistics of transporting waste from remote mines to secure storage sites, impact long-term prospects.

Systemic issues are also pressing. The cost competitiveness of vSMRs is dependent on economies of scale. The more units produced, the cheaper they become. Canada’s remote mining market may not be large enough to achieve these economies; especially if several vSMR technologies compete for market share. This highlights three points of emphasis. First, the market integration of vSMRs in non-mining applications such as industrial heat and hydrogen production is important in building the required scale. Second, the use of common supply chains for multiple markets, where possible, will reduce costs. Lastly, the positioning of vSMR development in Canada to capture international export market opportunities, is essential.

vSMRs have significant potential. But potential can only go so far. Demonstration of the technology at commercial scale is needed, and soon. The nuclear industry is responding with a demonstration at Chalk River, Ontario, scheduled for 2026. While an important step, demonstration is not the finish line – it is a point of departure. A long-term commercialization and industrial strategy is needed in Canada. The Government of Canada’s Small Modular Nuclear Reactor Action Plan is due to be launched this fall. Will this be a blueprint for an industrial strategy? Time will tell.

And time is money. Like all new technologies, the first vSMR built will be the most expensive. The nuclear industry needs to demonstrate the ability to build vSMRs in record time, and drive down costs for subsequent plants, quickly. Without this, the patience of investors, both public and private, will wane. So will the patience of mining firms seeking to reduce emissions at remote sites. The next decade will be crucial for the nuclear industry. The need for zero-emissions energy in our material world, has never been greater.

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Babatunde Olateju

Dr. Babatunde Olateju

Senior Research Associate

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