Canada boosts critical minerals projects with latest investments

Canada's newest commitment is to invest more than C$344 million ($249.5 million) toward its federal critical mineral strategy to prioritize the development of domestic supply chains for critical minerals, such as lithium, to further the country's green transition and digital economy, the government said March 8.

"Critical minerals represent a generational economic opportunity for Canada," Minister of Natural Resources Jonathan Wilkinson said in a statement released by his office. "Canada is building on its global leadership in the mining industry to seize this opportunity, and the federal government is all-in."

Wilkinson first announced the funding during a presentation at the Prospectors & Developers Association of Canada conference in Toronto March 7. The funding is part of the country's larger C$3.8 billion investment package directed at critical mineral research and development.

In the statement, Wilkinson's Natural Resources Canada department said the investment would promote the buildout of industries like electric vehicle manufacturing, a more competitive economy, cleaner technologies, and realigned supply chains among reliable trade partners.

The C$344 million investment will fund five new programs and initiatives under the critical mineral strategy. In addition, the Canadian government will provide a separate C$14 million investment package to fund six specific critical minerals projects.

The six projects that the C$14 million funding will support are being developed by Sherritt International, E3 Lithium, FPX Nickel, Search Minerals, Geomega Resources, and Prairie Lithium. Collectively, the companies are exploring options to establish or increase the production of lithium, cobalt, nickel, and rare earth elements in Canada.

Furthermore, the Canadian government will update federal initiatives to improve regulatory processes for major projects and establish a critical mineral supply chain collaboration with the UK, according to NRC.

While at PDAC, NRC said Wilkinson also met with Japanese battery supply chain companies to promote investments in Canada.

Canada's continued push for critical mineral development could alleviate concerns among its mining industry regarding more limited investment opportunities. The concerns are rooted in a federal policy launched in 2022 to more closely scrutinize investments from foreign state-owned enterprises. Once the policy was enacted, Canada ordered three Chinese companies to divest their respective stakes in Canadian companies with lithium projects.

Wilkinson's announcement further represents Canada's effort to match federal funding opportunities the US now provides to its own domestic industries through the Inflation Reduction Act.

The steel industry asks for support

Amid the critical mineral investment announcements, an industry group representing Canada's steel industry said it was calling on the country's government "for swift action to protect Canada's competitiveness and safeguard jobs" as it faces growing competition from unfairly traded imports.

"Canadian steel producers are a critical component of the economy supporting workers and communities right across our country," Canadian Steel Producers Association CEO Catherine Cobden said in a March 7 statement. "At the very time we are investing in real action to reduce climate emissions by at least 6 million mt by 2030, we are losing market share to high carbon offshore steel at an unprecedented rate."

The CSPA said offshore imports into Canada accounted for a 39% market share in 2022 from 19% in 2014. Canadian steel imports under HS code 72 from sources outside of North America totaled 4.53 million mt in 2022 compared with 3.23 million mt in 2014, according to S&P Global and Canadian trade statistics data.

The rise in imports has allowed foreign steel from countries with looser environmental restrictions to enter Canada at a time when the country's steel producers are attempting to reduce their own carbon footprint through investment, according to the CSPA. Meanwhile, other countries, like the US, are taking steps to protect their domestic industries during their respective energy transition efforts with policies such as the IRA, it added.

"While we appreciate the partnerships fostered to date, it must be recognized that the US and other governments are moving aggressively to attract climate investments and support its industries," Cobden said. "To remain competitive and build on our climate leadership, we are calling on the government to adopt an industrial strategy that is comprehensive in investment supports, prioritizes the use of today's lower carbon steel, takes additional steps to further improve our trade defenses, and maintains carbon pricing regimes in a manner that enable rather than threaten decarbonization investments in Canada."

Canadian steelmakers, such as Algoma Steel and ArcelorMittal Dofasco, have announced investments in recent years to build electric arc furnace operations in the country and reduce their emissions.

Meanwhile, in January, EVRAZ North America said it would have to lay off workers at its steel facilities in Regina, Saskatchewan, and Camrose, Alberta, because of high volumes of cheap imports.