Canada expected to announce $2 billion investment to produce critical minerals
Canada is expected to announce an investment of at least C$2 billion ($1.6 billion) for a strategy to accelerate the production and processing of critical minerals. Two senior government sources told Reuters that Prime Minister Justin Trudeau's government will release its annual budget on April 7 that could include the investment to ramp up the extraction of processing of critical minerals including nickel, lithium, cobalt and magnesium.
Canada previously announced financial support for building two facilities that will make battery materials for electric vehicles, and one battery gigafactory, but no agreements have yet been announced for mineral extraction or refining.
“There are some particular projects that we are looking at and working on at the present time,” Natural Resources Minister Jonathan Wilkinson said in a recent telephone interview with Reuters.
All the potential projects, “whether they're extraction or processing, need to be accelerated significantly, and that's what the critical mineral strategy will be about,” he added.
Canada’s finance ministry declined to confirm whether the investment would be in the budget that will be presented by Finance Minister Chrystia Freeland in the House of Commons.
“Canada has an abundance of valuable critical mineral deposits, and with the right investments, this sector can create thousands of new good jobs, grow our economy, and make Canada a vital part of the growing global critical minerals industry,” said Adrienne Vaupshas, press secretary for Freeland.
Canada, which is home to a large mining sector, has a multi-billion-dollar fund set up to invest in green technologies and is trying to woo companies involved in all levels of the EV supply chain to safeguard the future of its manufacturing heartland in Ontario as the world seeks to cut carbon emissions.
Ontario is geographically close to U.S.-based automakers in Michigan and Ohio, and General Motors Co., Ford Motor Co. and Stellantis NV have all announced plans to make electric vehicles at factories in the Canadian province.
Canada's critical mineral strategy will focus on, among other things, driving research, innovation and exploration, one of the sources said.
GM said that it was investing C$2 billion on two plants, including one that will produce an electric vehicle for commercial use in Canada. Last month, GM said it had partnered with South Korea’s POSCO Chemical to build a facility to make battery materials in Quebec.
Scott Bell, the president and managing director of GM Canada, said last month that Canada's abundance of nickel and other raw materials would be used to make cathode active material in the Canadian province, without elaborating.
“These companies are going to need those critical minerals that our country has, so we need to start aggressively ramping up the mining and processing required,” Canadian Industry Minister Francois-Philippe Champagne said in Vancouver.
Demand for minerals needed for batteries, including lithium and cobalt, could increase by almost 500 percent by 2050, the World Bank estimates. Currently Asia, and in particular China, dominates global production and processing of critical minerals, rare earths and rare metals used to make EVs.