Canada will invest $2 billion in a mineral strategy for the electric vehicle battery supply chain

Chrystia Freeland, Canada's Deputy Prime Minister and Finance Minister, talks at a press conference on February 17, 2022 in Ottawa, Ontario, Canada. Image Credit: Reuters

Reuters: According to two senior government sources, Canada's federal budget will contain at least C$2 billion ($1.6 billion) for a strategy to speed the extraction and processing of essential minerals needed for the electric vehicle (EV) battery supply chain.

The investment will be made by Prime Minister Justin Trudeau's government, which is set to release its budget on Thursday, to increase the extraction and processing of critical minerals such as nickel, lithium, cobalt, and magnesium, according to sources familiar with the matter but who was not authorized to speak on the record.

"There are some specific projects that we are looking at and working on at the moment," Natural Resources Minister Jonathan Wilkinson told Reuters in a recent phone interview.

All potential projects, "whether extraction or processing," he added, "need to be significantly accelerated, and that's what the critical mineral strategy will be about."

Canada's finance ministry declined to confirm whether the investment would be included in the budget that Finance Minister Chrystia Freeland will present to the House of Commons.

"Canada has a great deal of valuable critical mineral deposits, and with the right investments, this sector can create thousands of new good-paying jobs, grow our economy, and placement Canada as a key player in the global critical minerals industry," said Adrienne Vaupshas, Freeland's press secretary.

According to one of the sources, there are "many active conversations" between the Canadian government and companies "on the need to accelerate and scale up the production of raw materials used in EV batteries."

Canada, which has a large mining industry, has established a multibillion-dollar fund to invest in green technologies and is wooing companies involved in all levels of the electric vehicle supply chain to ensure the future of its manufacturing heartland in Ontario as the world seeks to reduce carbon emissions.

Because Ontario is close to American automakers in Michigan and Ohio, General Motors Co., Ford Motor Co., and Stellantis NV have all declared ambitions to build electric vehicles in the province.

A 2020 Mini Cooper S electric vehicle is on show at the Canadian International Auto Show in Toronto, Ontario, Canada, On February 18, 2020. Image Credit 

Mine Waste Minerals

Because opening new mines can take years, if not a decade or more, Wilkinson said some of the projects being evaluated involve "tails from existing mines from which you could extract key minerals."

He explained, "We're looking at brines and oil sands, tailings ponds, and everything of that."

The Mining Association of Canada's vice president of economic and northern affairs, Brendan Marshall, indicated that such a project would necessitate research.

Marshall noted that "research and development" are needed to develop systems that can identify and remove important minerals "from the general waste stream."

According to one of the sources, Canada's vital mineral strategy would prioritize research, innovation, and exploration.

On Monday, General Motors announced a C$2 billion investment in two plants, one of which will create an electric car for commercial use in Canada. Last month, GM announced a partnership with POSCO Chemical of South Korea to develop a battery-materials manufacturing facility in Quebec.

Last month, GM Canada's president and managing director, Scott Bell, stated that the country's abundant nickel and other raw materials would be used to manufacture cathode active material in the province, but did not elaborate.

"These enterprises will demand those vital minerals that our country has," Canadian Industry Minister Francois-Philippe Champagne said last week in Vancouver.

According to the World Bank, demand for minerals used in batteries, such as lithium and cobalt, might increase by about 500 percent by 2050. Asia, particularly China, currently dominates the global production and processing of essential minerals, rare earth, and rare metals required in the manufacture of electric vehicles.

Neo Performance Materials Inc., a rare pile of earth and rare metals processing firm based in Toronto, has a lot of catching up to do, according to Constantine Karayannopoulos, president and chief executive officer.

In a telephone conversation, Karayannopoulos added, "We are collectively behind the eight ball in the West, behind China." "China has a stranglehold on this market... Because we're playing catch-up, we'll need a lot of money to establish the supply chain."