Federal Critical Minerals Funding Unearthed
The energy transition and global demand for critical minerals, and the opportunities these present for Canada, continue to be areas of focus for the Government of Canada (Canada). Building upon the release of the Canadian Critical Minerals Strategy in late 2022 (discussed in our previous blog post), Canada recently announced two new funding opportunities in the critical minerals space.
Strategic Innovation Fund
To better position Canada to take advantage of the opportunity presented by the energy transition and ongoing demand for critical minerals, Budget 2022 proposed $1.5 billion in funding through the Strategic Innovation Fund (SIF) to accelerate investments in critical minerals projects. Additionally, Budget 2023 included another $500 million over 10 years to the SIF to support these targeted investments. On July 14, Canada announced the criteria for funding eligibility.
For projects to qualify, they must: (i) target one or more of 31 identified critical minerals; (ii) promote the integration of multiple segments of the critical minerals value chain; (iii) develop highly-innovative projects to grow Canada’s critical minerals industry; (iv) align with one or more listed areas of focus for critical minerals investment (clean technologies, advanced manufacturing, and information and communications technologies); and (iv) demonstrate sufficient financial resources and technical ability to complete the project.
Priority is expected to be given to projects that focus on lithium, graphite, nickel, cobalt, copper, and rare earth elements as well as to “advanced-stage projects capable of demonstrating significant financial and technical readiness” and those that offer a strategic advantage to Canada and its partners. This inter-governmental effort consisting of federal departments, provincial partners, Indigenous communities and industry stakeholders has already invested $249 million in such operations.
The application process for SIF funding begins with a consultation to ensure alignment with priorities and eligibility requirements. SIF officials may then recommend submitting a statement of interest kicking off the full application process. Finally, a due diligence assessment of successful applicants is completed before a contribution agreement is developed and implementation begins.
Critical Minerals Research Development and Demonstration Program
In addition to the SIF funding criteria, on July 18, a second call for proposals for the Critical Minerals Research Development and Demonstration (CMRDD) Program was announced. This marks a total of $40 million in available funding for developing technology and pilot projects. The funding is meant to push pre-commercial stage projects moving into demonstration and then adoption and integration into domestic and international value chains. Up to $5 million is available for projects that meet technology readiness levels.
The CMRDD Program is open to any Canadian recipient, including mining companies, community groups, Indigenous groups, academic institutions, as well as provincial, territorial, regional and municipal governments. The application deadline is 4 p.m. September 29, 2023.
These funding announcements are an important step in Canada’s continued move towards a 2050 net-zero emissions goal.
McCarthy Tétrault will continue to follow developments in the minerals and mineral products industry in Canada. Our Power Group and Global Metals & Mining Group provide leading advice on national and international power and mining projects, offering our clients a 360 degree view of the power and mining industries. For further information, please contact your McCarthy Tétrault trusted advisor or one of the authors.