“This is a game-changer,” said Greg Andrews, managing director of Search Minerals Inc, which is developing a rare earths mine in Newfoundland and Labrador. Rare earths are used to make magnets that transfer electricity into motion for electric vehicles.
While Canada has long been known as a major gold producer, its efforts to mine and process EV minerals have lagged behind other countries, including China.
Miners have also complained that Ottawa’s recent investments in battery components and facilities – including a giga-battery factory in Windsor which is a joint venture between Stellantis and South Korea’s LG Energy Solution – have overlooked the need these facilities to source minerals to build the EV products.
“The global economy is going green. Canada can be at the forefront, or we can be left behind,” Finance Minister Chrystia Freeland said Thursday when presenting the budget to Parliament.
The spending does not include plans to reduce regulatory requirements for new mines, as did the industry support announced last week by US President Joe Biden. Mining in Canada is largely regulated at the provincial level. Quebec, for example, is recognized as much more open to new mines than British Columbia.
“The general climate in Canada is becoming more and more favorable, which is very good for the industry,” said David D’Onofrio of Toronto-based bank PowerOne Capital Markets, which is invested in several Canadian lithium and nickel projects. .
The budget plans to double the exploration tax credit to 30% for a range of EV metals, including nickel, lithium, cobalt, graphite, copper, rare earth elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals and uranium.
“What we see in the budget is a carefully thought out plan, with funds targeted to segments of the mining ecosystem that all collectively need to be strengthened,” said Brendan Marshall of the Mining Association of Canada, a industry professional group.
Canada’s critical mineral deposits at current prices are valued at around C$340 billion, a senior official said Thursday.
“The key to moving beyond mining is to do more mining so that you have enough resources to develop supply chains,” said Toronto-based critical minerals consultant Ryan Castilloux. at Adamas Intelligence.
The big North
The miners also said the budget should help further develop Canada’s North, which is sparsely populated but contains much of the country’s mineral wealth.
“The only way to develop the Far North is to have programs that encourage prospectors, geologists and others to explore there,” said Stan Bharti, CEO of Toronto-based bank Forbes & Manhattan, which has invested in several Canadian lithium and graphite.
Ottawa says the budget aims to make critical mining projects less risky for business, in part by supporting infrastructure investment with C$1.5 billion over seven years, supporting processing with C$1.5 billion over six years and by investing almost 79 million Canadian dollars over five years in detailed projects. survey.
“You need these other industries, otherwise the metals will go to China to be processed,” said Kiril Mugerman, CEO of rare earth recycler Geomega Resources Inc.
The budget also includes C$25 million for “early engagement and capacity building of Indigenous communities to support their participation in the Critical Minerals Strategy.”
While the miners said they planned to apply for funding, they would wait for more details. “We need to see the mechanics of the support being offered to understand how best to use the funding available,” said Mark Saxon, CEO of Vancouver-based rare earths processor Medallion Resources Ltd.
Vale SA, which produces nickel in Ontario as well as Newfoundland and Labrador, said spending plans show Ottawa “has a real opportunity to become a global ESG champion of critical minerals and the chain.” supply of electric vehicle batteries”.
Rio Tinto Ltd and BHP Group Ltd, which moved their copper and nickel exploration offices to Toronto last year, were not immediately available for comment.
($1 = 1.2583 Canadian dollars)
(By Ernest Scheyder and Stever Scherer; Editing by Matthew Lewis)