OTTAWA, April 4 – Canada’s federal budget will include a minimum CA$2 billion (US$1.6 billion) investment in a strategy to accelerate the production and processing of critical minerals used in the electric vehicle (EV) battery supply chain. are needed, two senior government sources said.
Prime Minister Justin Trudeau’s government, which is due to publish its budget on Thursday, will make the investment to speed up the extraction and processing of critical minerals such as nickel, lithium, cobalt and magnesium, but sources familiar with the matter said unfairly to speak protocol.
The investment could span more than a year, but sources declined to comment on the timeframe.
Canada last month announced financial support for the construction of two facilities to manufacture battery materials for electric vehicles and a battery gigafactory, but no agreements for mineral extraction or refining have yet been announced. Continue reading
“There are some specific projects that we are currently looking at and working on,” Natural Resources Secretary Jonathan Wilkinson said in a recent phone interview with Reuters.
All potential projects, “whether it’s extraction or processing, need to be accelerated significantly, and that’s what the critical minerals strategy will be about,” he added.
Canada’s Treasury Department declined to confirm whether the investment would fall within the budget to be presented by Treasury Secretary Chrystia Freeland in the House of Commons.
“Canada has an abundance of valuable deposits of critical minerals and with the right investments, this sector can create thousands of new good jobs, grow our economy and make Canada an important part of the growing global critical minerals industry,” said Adrienne Vaupshas, Press officer for Freeland.
There are “many active discussions” between the Canadian government and companies “about the need to accelerate and expand the production of raw materials used in batteries for electric vehicles,” one of the sources said.
Canada, which is home to a large mining sector, has set up a multi-billion dollar fund to invest in green technologies and is trying to court companies operating at all levels of the EV supply chain for the future of its manufacturing core to secure Ontario as the world seeks to cut carbon emissions.
Ontario is geographically close to US automakers in Michigan and Ohio, and General Motors Co (GM.N), Ford Motor Co (FN) and Stellantis NV (STLA.MI) have all announced plans to produce electric vehicles in factories in the US USA manufacture Canadian province.
MINERALS FROM MINING WASTE
Because it can take many years — even a decade or more — to open new mines, Wilkinson said some of the projects under consideration “involve tailings from existing mines from which one could extract critical minerals.”
“We’re looking at brines and oil sands, tailings ponds and all of that stuff,” he said.
Brendan Marshall, vice president of economic and northern affairs for the Mining Association of Canada, said this type of project would require research.
“There needs to be research and development” to develop technology that can identify and separate critical minerals “from the general waste stream,” Marshall said.
Among other things, Canada’s critical minerals strategy will focus on advancing research, innovation and exploration, one of the sources said.
GM said Monday it is investing CA$2 billion in two plants, including one that will produce an electric vehicle for commercial use in Canada. Last month, GM announced it had partnered with South Korea’s POSCO Chemical (005490.KS) to build a battery materials manufacturing facility in Quebec. Continue reading
Scott Bell, the president and chief executive officer of GM Canada, said last month that Canada’s surplus of nickel and other raw materials would be used to make cathode-active materials in the Canadian province, without elaborating.
“These companies are going to need these critical minerals that our country has, so we need to start aggressively increasing mining and processing,” Canadian Industry Minister Francois-Philippe Champagne said in Vancouver last week.
Demand for minerals needed for batteries, including lithium and cobalt, could increase by nearly 500% by 2050, according to World Bank estimates. Currently, Asia, and China in particular, dominates the global production and processing of critical minerals, rare earths and rare metals used to manufacture electric vehicles.
Constantine Karayannopoulos, president and chief executive officer of Neo Performance Materials Inc. (NEO.TO), a Toronto-based rare earth and rare metal processing company, said Canada and North America have a lot of catching up to do.
“We stand collectively behind the Eight Ball in the West, behind China,” Karayannopoulos said in a telephone interview. “China dominates this space… We need a lot of money (to build the supply chain) because we’re catching up.”
($1 = 1.2517 Canadian Dollars)
Reporting by Steve Scherer Editing by Paul Simao