Canada Launches $1.1 Billion Fund for Critical Minerals Development

The fund, to be spent over seven years, backs clean energy projects

November 24, 2023


Canada’s Ministry of Energy and Natural Resources has launched a CA$1.5 billion (~$1.1 billion) fund to develop critical minerals infrastructure to be spent over seven years.

The fund aims to address infrastructure gaps and support clean energy and electrification.

The ministry has issued a call for proposals (CFP) with a deadline of February 29, 2024, to submit applications.

Post the closure of the CFP window, applications for the pre-construction and project development stream will undergo a cohort assessment. The infrastructure deployment stream will operate on a first-come, first-served basis for application acceptance and consideration, ensuring the processing of applications in the order they are received.

The maximum funding per project is CA$50 million (~$36.51 million), rising to CA$100 million (~$73 million) for provincial or territorial governments.

Entities eligible for the funding must be Canadian legal entities (for-profit, not-for-profit, universities), provincial/territorial/municipal governments, and indigenous recipients, including communities, tribal councils, and entities with 51% or greater indigenous control.

Eligible clean energy initiatives include mine site infrastructure and regional projects, and transportation projects encompassing infrastructure connecting mines to processing facilities.

The scope of activities, pre-construction, and project development (Stream 1) involves consultation, feasibility studies, engineering, and environmental assessments. Infrastructure deployment (Stream 2) includes constructing, rehabilitating, and creating energy or transportation infrastructure assets, focusing on clean energy projects.

Stream 1 may prioritize projects seeking CA$10 million (~$7.3 million) or less. In most cases, contributions are capped at 50% of total eligible expenditures, except for Arctic and Northern projects and Indigenous-led projects, which may receive up to 75% funding. Projects using a public-private partnership model may secure up to 33% of total eligible expenditures funded.

Recipients have the flexibility to allocate up to 15% for coordinating funding distribution and managing agreements with additional entities participating in approved project activities.

Last month, Australia announced an AU$2 billion ($1.26 billion) financing for critical minerals, including rare earths, expanding total investments to AU$6 billion ($3.79 billion). This supports the country’s “Critical Minerals Strategy 2023-2030” and strengthens the partnership with the United States, ensuring a secure supply chain and diversifying manufacturing sectors for both nations.

The U.S. Department of Energy is directing $30 million to extract rare earth minerals from domestic coal sources, aiming to boost domestic production, reduce dependence on imports, and create jobs in regions linked to fossil fuel production.