Canada bets $400M on B.C. critical minerals in push to strengthen domestic supply chains

Canada is investing up to $400 million in Teck Resources to expand critical minerals production and bolster domestic supply chains. Photo by Norm Betts /Bloomberg

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The Canadian government will contribute as much as C$400 million ($282 million) to Teck Resources Ltd.’s plans to boost output at a key metals refinery, creating a deal that could ensure the country receives a portion of the future germanium, antimony and gallium supply.

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The government, alongside the C$15 billion Canada Growth Fund, agreed with Teck to support increased processing capacity for strategic metals at the Trail zinc-and-lead smelter in British Columbia, according to a statement Tuesday. The facility produces metals such as silver and germanium, mostly as byproducts.

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The move comes after Teck and Anglo American Plc agreed last year to a merger that will create a $50 billion metals giant focused on copper mines in Chile and Peru. To secure Canadian regulatory approval for the transaction, the companies agreed to invest as much as C$850 million in the Trail operations and to explore ways to add copper processing and expand output for germanium and other critical minerals.

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The Canada Growth Fund said its equity-like investment of C$400 million, if realized, would contribute to the total investment package for Trail. The expansion could double the facility’s germanium and antimony production and potentially add gallium capacity for the first time, the statement added.

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The investment, which remains subject to certain conditions, is the first to be announced under Prime Minister Mark Carney’s C$2 billion Critical Minerals Sovereign Fund to provide capital for equity investments, loan guarantees and offtake agreements to support mining projects. That initiative, now called the Canada Critical Minerals Accelerator, is being managed by Export Development Canada.

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The fund will focus on the overlap between the specific critical minerals identified by each of the Group of Seven nations as being strategically important from an economic and national defence stance, Canadian Energy and Natural Resources Minister Tim Hodgson said in an interview, declining to comment on specific commodities.

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Canada has already begun stockpiling graphite and scandium after striking separate agreements with Nouveau Monde Graphite Inc. and Rio Tinto Group respectively.

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“In the contracts that we’ve done so far, the producer will stockpile it for us,” Hodgson said, referring to the graphite and scandium deals. The government may eventually create its own stockpiling warehouses, he added, “but that’s a future decision.”

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