Exclusive: Canada to invest C$2 billion in metals strategy for electric vehicle battery supply chain

OTTAWA, April 4 (Reuters) – Canada’s federal budget will include an investment of at least C$2 billion (US$1.6 billion) for a strategy to accelerate production and processing of critical minerals needed for the electric vehicle (EV) battery supply chain, two senior government sources said. .

The informed sources said that the government of Prime Minister Justin Trudeau, whose budget is due to be announced on Thursday, will undertake the investment to step up the extraction of processing important minerals including nickel, lithium, cobalt and magnesium. He is not authorized to speak on the record.

The investment could be spread out over a year, but sources declined to comment on the timeframe.

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Canada last month announced financial support to build two facilities that will manufacture battery materials for electric cars, and one battery plant, but no agreements have been announced for extracting or refining the minerals. Read more

“There are some specific projects that we are looking at and working on at the moment,” Natural Resources Secretary Jonathan Wilkinson said in a recent telephone interview with Reuters.

He added that all potential projects, “whether it’s extraction or processing, need to be expedited significantly, and that’s what the Critical Minerals strategy will be about.”

Finance Canada has refused to confirm whether the investment will be in the budget that Finance Minister Chrystia Freeland will present in the House of Commons.

Adrienne Vaupshas said: “Canada has an abundance of important mineral deposits, and with the right investments, this sector can create thousands of new good jobs, grow our economy, and make Canada a vital part of the growing global vital minerals industry.” Freeland’s press secretary.

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One source said there were “many active conversations” between the Canadian government and companies “about the need to speed up and increase production of raw materials used in electric car batteries”.

Canada, which is home to a large mining sector, has a multi-billion dollar fund set up to invest in green technologies and is trying to attract companies involved at all levels of the EV supply chain to protect the future of Ontario’s manufacturing heartland as the world seeks to cut carbon emissions.

Ontario is geographically close to the US automakers in Michigan and Ohio, and General Motors Corporation. (GM.N)Ford Motor Company (FN) and Stellantis NV (STLA.MI) They all announced plans to build electric cars in factories in the Canadian province.

minerals from mining waste

Since it can take many years – even a decade or more – to open new mines, Wilkinson said some of the projects being considered involve “tails from existing mines from which you can extract important minerals.”

“We’re looking at brines, oil sands, waste ponds, and all these things,” he said.

This type of project requires research, said Brendan Marshall, vice president of economics and northern affairs for the Canadian Mining Association.

“There needs to be research and development ‘to develop technologies that can identify and separate critical minerals’ from the general waste stream,” Marshall said.

One of the sources said Canada’s critical minerals strategy will focus, among other things, on advancing research, innovation and exploration.

General Motors said Monday it is investing C$2 billion in two plants, one of which will produce an electric vehicle for commercial use in Canada. Last month, General Motors said it had entered into a partnership with South Korea’s POSCO Chemical Co. (005490.KS) To build a battery materials manufacturing facility in Quebec. Read more

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Scott Bell, president and managing director of General Motors Canada, said last month that Canada’s abundance of nickel and other raw materials would be used to make the active cathode material in the Canadian province, without elaborating.

“These companies are going to need those important minerals that our country has, so we need to start aggressively with the increased mining and processing required,” Canadian Industry Minister Francois-Philippe Champagne said in Vancouver last week.

The World Bank estimates that the demand for metals needed for batteries, including lithium and cobalt, could increase by about 500% by 2050. Currently, Asia, particularly China, dominates the global production and processing of important minerals, rare earths, and rare earths used to make electric vehicles.

Konstantin Karianopoulos, President and CEO, Neo Performance Materials Inc(NEO.TO)a rare earths and rare metals processing company based in Toronto, said Canada and North America have a lot to catch up with.

“We are collectively behind the eight ball in the West, behind China,” Karayannopoulos said in a telephone interview. “China is dominating this space… we need a lot of money (to build the supply chain) because we are playing catch-up.”

(1 dollar = 1.2517 Canadian dollars)

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(covering) by Steve Shearer Editing by Paul Simao

Our criteria: Thomson Reuters Trust Principles.

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