Plan to invest C$3.8 billion in critical mineral production introduced in Canada
The Canadian mining industry welcomed Ottawa’s plan to invest C$3.8 billion ($3.02 billion) to boost the production of critical minerals.
The spending was announced during the national federal budget unveiling on April 7. The bill promises grants for mineral surveying, processing and recycling, as well as tax credits for digging new mines and subsidies for infrastructure, though it would not reduce regulatory oversight.
“This is a game-changer,” Greg Andrews, chief executive of Search Minerals Inc. told Reuters. Search Minerals is developing a rare earths mine in Newfoundland and Labrador.
“The world economy is going green. Canada can be in the vanguard, or we can be left behind,” Finance Minister Chrystia Freeland said while she presented the budget to parliament.
The spending does not include plans to lessen regulatory requirements for new mines, just like the industry support announced by U.S. President Joe Biden. Mining in Canada is largely regulated at the provincial level. Quebec, for example, is known as far more open to new mines than British Columbia.
The budget foresees doubling of the exploration tax credit to 30 percent for a range of electric vehicle (EV) metals, including nickel, lithium, cobalt, graphite, copper, rare earths 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 targeted funds at segments of the mining ecosystem that all collectively need to be bolstered,” said Brendan Marshall of the Mining Association of Canada, an industry trade group.
Canada’s critical mineral deposits at current prices are valued at approximately C$340 billion, a senior official said.
Miners also said the budget should help to further develop Northern Canada, which is sparsely populated but contains much of the nation's minerals wealth.
“The only way you develop the Great North is by having 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 projects.
Ottawa says the budget aims to make critical mineral projects less risky for companies, in part by supporting infrastructure investments with C$1.5 billion over seven years, backing processing with C$1.5 billion over six years, and investing almost C$79 million over five years in detailed surveying.
The budget also includes C$25 million for “early engagement and Indigenous communities’ capacity building to support their participation in the critical minerals strategy.”
Vale SA (VALE3.SA), which produces nickel in Ontario as well as in Newfoundland and Labrador, said the spending plans show Ottawa “has a real opportunity to become a global ESG champion of critical minerals and the EV battery supply chain.”