Gabriel Friedman, Financial Post

Published Jun 10, 2024  

Ottawa expands critical minerals list possibly unlocking funding millions for miners

Three new additions — high-purity iron, phosphorus and silicon metal — play a role in the energy transition

The federal government is adding high-purity iron, phosphorus and silicon metal to its critical minerals list, potentially unlocking millions of dollars in funding programs for miners and developers of the three minerals.

The critical minerals list was introduced in 2021, with 31 minerals and metals becoming eligible for special tax credits and other funding streams from the government. The federal government loosely defines critical minerals as having a threatened supply chain, but can be produced in Canada, and essential to the country’s economic and national security or the energy transition.

 “Investments in critical minerals projects create good jobs for workers, more avenues for Canadian innovation and lower emissions across the country.” Natural Resources Minister Jonathan Wilkinson, who travelled to Sudbury, Ont., on Monday to make the announcement, said in a press release.

The list, which is updated every three years, now includes 34 elements, ranging from commonly known base metals such as copper and nickel to more obscure metals like gallium.

Each of the elements added to the list on Monday plays a role in the energy transition.

High-purity iron is essential to making steel, and both the federal and Ontario governments have invested hundreds of millions of dollars to help two steelmaking companies lower the emissions profiles of their facilities.

Phosphorus, sometimes called phosphate, can be combined with potash to boost food productivity and food security, Natural Resources Canada said. It is also a primary component in lithium iron phosphate batteries, which are rapidly emerging as an alternative chemistry to lithium-ion batteries. Companies such as Burnaby, B.C.-based Nano One Materials Corp. are focused on refining and licensing their processes to make LFP cathodes.

 “Phosphorus plays a critical role in the production of LFP cathode materials, which are widely used in lithium-ion batteries,” Adam Johnson, a spokesperson at Nano One Materials, said.

Meanwhile, silicon is used in semiconductor chips, which are essential for electronic devices. A semiconductor shortage in recent years forced automakers to curtail production by cutting shifts at certain Canadian auto plants.

The federal government has introduced a range of policies in recent years to benefit companies working in the critical minerals sector. This includes a 30 per cent tax credit for investors in junior mining companies based on the amount of their investment, which essentially allows the company to pass on expenses to their investors to claim as tax credits.

Natural Resources Canada in 2023 also announced it would begin accepting applications for funding under the $1.5-billion Critical Minerals Infrastructure Fund. It said it would look to contribute funds to projects that “address key infrastructure gaps to enable sustainable critical minerals production and to connect resources to markets.”

 There is also the Critical Minerals Research, Development and Demonstration Program, which supports “the development of innovative processing technologies for the critical minerals industry.”

On Monday, Electra Battery Materials Corp. announced it had received $5 million from that fund to advance its battery metals recycling plant in Temiskaming Shores, Ont., 500 kilometres north of Toronto.

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