Canada backs critical minerals projects worth $6.4B

Canada’s federal government unveiled plans to support 25 new investments it says will help to unlock some $6.4 billion (US$4.6 billion) of critical minerals projects tied to the production of graphite, rare earth elements (REE) and scandium.

Ottawa is also designating critical minerals as essential to Canadian defence and national interests, Natural Resources Minister Tim Hodgson said Friday at the end of a Group of Seven nations meeting of energy and environment ministers in Toronto. This will allow the country to start its own defence stockpiling regime and to support multilateral stockpiling efforts. Prime Minister Mark Carney earlier this year opened a Major Projects Office to fast-track energy and mining projects.

“If you need a proof point that the G7 and multilateralism remains vital and relevant, this is it,” Hodgson told reporters. “If you’re wondering whether a middle power like Canada can truly be a leader, I hope you have your answer.”

Other measures announced Friday include joint offtake arrangements and co-investments with nine allied countries and industry partners from France, Germany, Italy, Japan, Luxembourg, Norway, the United States, Australia and Ukraine. Canada has also signed offtake deals with Nouveau Monde Graphite (NYSE: NMG; TSX.V: NOU) for graphite and with Rio Tinto (ASX, NYSE, LSE: RIO) for scandium.

G7 plan

 “Through the Critical Minerals Production Alliance and the G7 Critical Minerals Action Plan, we are mobilizing capital, forging international partnerships and using every tool at our disposal to build resilient, sustainable and secure supply chains,” Hodgson said in a statement. “These investments are foundational to Canada’s sovereignty, competitiveness and leadership in the global economy.”

The moves follow China’s decision in April to impose export restrictions on seven REE in response to U.S. tariffs and limits on semiconductors. Although China on Thursday agreed to suspend new REE export curbs for a year, the Asian country still accounts for about 90% of rare earth refining and permanent magnet production. It didn’t address the limits imposed in April that still impact supply chains.

Nouveau Monde’s US$415-million capex Matawinie mine in Quebec is among the priority projects singled out in Friday’s statement. The miner has signed offtake arrangements with the Government of Canada, Japan’s Panasonic and Luxembourg-based commodity trader Traxys, while the Japanese government has expressed an “investment intention,” Natural Resources Canada said without elaborating.

Canada has also signed an offtake agreement with Rio Tinto’s scandium production plant in Sorel-Tracy, Quebec, with the Canada Growth Fund agreeing to an equity-like royalty investment of about $25 million.

More graphite

Friday’s deal flurry includes a letter of interest for up to US$500 million from Export Development Canada for Vianode’s synthetic graphite facility in Ontario. The Norwegian company has also received letters of interest from the Canada Infrastructure Bank and the German government, which would provide an export credit guarantee of up to US$300 million, Ottawa said.

Canada also said it’s conditionally agreed to invest up to $36.3 million by Ottawa in Ucore Rare Metals’s (TSXV: UCU; US-OTC: UURAF) processing facility in Kingston, Ont.

Canadian miner Northern Graphite (TSXV: NGC; US-OTC: NGPHF), which runs the Lac des Iles project in Quebec, signed a letter of intent for an offtake and toll processing agreement with Italy’s Alkeemia, Ottawa said. Lastly, Torngat Metals inked an offtake and technology collaboration agreement with French company Carester for the production and processing of rare earth elements.

Defence aims

Stockpiling critical minerals will help Canada to strengthen domestic capabilities in strategic sectors while mobilizing and protecting domestic production. It will also support Arctic sovereignty and advance the North Atlantic Treaty Organization’s (NATO) deterrence and defence goals by expanding transatlantic capacity, the federal government says.

“By protecting domestic production under volatile global conditions, we ensure a secure supply of critical minerals to Canadian and allied defence industries,” Hodgson said.

G7 members announced the creation of the Critical Minerals Production Alliance in June at a leaders’ summit in Kananaskis, Alberta. The initiative stems from “a shared commitment by G7 partners to diversify the responsible production and supply of critical minerals, encourage investments in critical mineral projects and local value creation, and promote innovation,” the countries said.

“This first round of G7 Alliance projects sends the world a very clear signal: we are serious about reducing market concentration and dependencies, safeguarding national security and sovereignty, mobilizing capital, and driving investments in sustainable critical minerals projects,” Hodgson said in the text of a speech.

He added that he jokingly refers to the alliance as “the Buyers’ Club.”