https://www.reuters.com/world/americas/canadian-miners-cheer-ottawas-critical-minerals-budget-plan-2022-04-08/
April 8, 2022 at 3:39 PM EDT
Last Updated 8 hours ago OTTAWA, April 8 (Reuters) - Canadian miners say Ottawa's plan to spend C$3.8 billion ($3.02 billion) to boost domestic production of lithium, copper and other strategic minerals should help propel the country's efforts to become a key part of the global electric vehicle supply chain.
The spending, announced during Canada's federal budget unveiling on Thursday, 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," said Greg Andrews, chief executive of Search Minerals Inc (SMY.V), which is developing a rare earths mine in Newfoundland and Labrador. Rare earths are used to make magnets that transfer electricity into motion for EVs.
While Canada has long been known as a major gold producer, its efforts to mine and process EV minerals have lagged other nations, including China.
Miners also have complained that Ottawa's recent investments in battery components and facilities - including a battery gigafactory in Windsor that is a joint venture between Stellantis (STLA.MI) and South Korea's LG Energy Solution (373220.KS) - overlooked those facilities' need to procure minerals to build the EV products.
"The world economy is going green. Canada can be in the vanguard, or we can be left behind," Finance Minister Chrystia Freeland said on Thursday when 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 last week 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 general climate in Canada is becoming more and more supportive, 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 foresees doubling of the exploration tax credit to 30% for a range of 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 on Thursday.
"The key to moving beyond mining is to do more mining so you have ample supply of resources needed to grow supply chains," said Ryan Castilloux, a Toronto-based critical minerals consultant at Adamas Intelligence.