Critical battery minerals see significant investment in Budget 2021
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Apr 20, 2021
Emma Jarratt

The federal government is backing up its strong stand on developing Canada’s national battery supply chain, as well as its bilateral commitments, with nearly $50 million in funding for research, development and policy-informing initiatives

The federal government is backing up its strong stand on developing Canada’s national battery supply chain, as well as its bilateral commitments, with nearly $50 million in funding for research, development and policy-informing initiatives

Critical minerals are coming out a winning sector in Budget 2021 with $46.4 million in total funding over the next three years directed to setting up a research centre, informing cross-border policies with the United States and research and development (R&D).

“Canada has rich reserves of the critical minerals needed for electric vehicle batteries and solar panels, along with other low-carbon technologies needed to reach net-zero,” reads Budget 2021. “The resources needed for these technologies create good jobs in regions across the country.”

The money will be divided between two major streams: $9.6 million will be used over three years to establish a Critical Battery Minerals Centre of Excellence at Natural Resources Canada and $36.8 million over three years will go towards R&D in the mining and refining sectors.

“We thought critical minerals was going to be something that played fairly significantly, but the specific shape that was going to take was unclear,” says Brendan Marshall, VP of economic affairs and policy lead at The Canadian Mining Association. “I am pleased the government has seen this opportunity and has risen to the occasion to give Canada the chance that it needs to be the player that we want to be in that space.”

Canada’s list of critical minerals
Canada’s list of critical minerals. Click the image for full size PDF. Source: Government of Canada

Canada is coming from a position of strength with respect to developing a national battery supply chain and the 2021 budget recognizes that potential by taking concrete financial steps to support and nurture it. In March, Natural Resources Canada identified a list of 31 critical minerals that Canada produces and says it’s committed to positioning Canada as “the supplier of choice for global markets.”

“Enhancing Canada’s supply of Critical Minerals” is a section of the budget that predicts a boon for Canadian industry directly and indirectly related to critical minerals as the global demand for electric vehicles and solar panels soars. It also is another indication the government is still on the “Mines to Mobility” strategic pathway, says Marshall who notes, “the government has given themselves significant tools” to achieve that end.

Canada-U.S. joint commitment

The government says it places significant weight on upholding the commitments made last year in the U.S.-Canada Joint Action Plan on Critical Minerals Collaboration. The budget details how investment in the development of an end-to-end battery supply chain is “essential for our energy security” and states Canada could position itself as a “vital producer” in the world for critical battery metals.

That action plan is seen as North America’s answer to global supply chain concerns — only since exacerbated by the global COVID-19 pandemic — regarding secure mineral supplies for batteries, communication and defence. The cross-border agreement follows the example set by Asia and Europe where integrated battery supply chains between countries are already being used.

A statement from Natural Resources Minister Seamus O’Regan at the time the plan was signed read, “By finalizing the Canada–U.S. Joint Action Plan on Critical Minerals Collaboration, we are advancing secure access to the critical minerals that are key to our economic growth and security — including uranium and rare earth elements — while bolstering our competitiveness in global markets and creating jobs for Canadians.”

Few specific details about the agreement have been released, but in March Reuter’s reported on documents the outlet claimed to have been given that detailed “a closed-door virtual meeting with miners and battery manufacturers to discuss ways to boost Canadian production of EV materials” that included overcoming “logistical” issues within Canada.

That meeting followed a joint announcement made by President Joe Biden and Prime Minister Justin Trudeau in February 2021, where the two leaders pledged to build an EV supply chain between Canada and the U.S

Marshall indicates these cross-border talks and partnerships are “critical” in order to keep not only Canada’s integrated automotive sector moving forward, but also taking a lead from what other countries have done that worked.

“I think the table is set, the tools are in place,” says Marshall. “[N]ow we are really just looking at timing because of the speed at which the rest of the world is moving and the level of competition to attract these investments in this space.”

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