Finding funding: New opportunities abound for the mining industry
March 07, 2023
There is funding available for mining clients in Canada to advance their projects
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One of the biggest challenges mining faces is securing sufficient initial investment and sustaining growth capital through the life of a mine. Fortunately, increased access to funding is now a reality in Canada. There is more federal money accessible through grants and low interest loans than ever before. These are targeting innovation, decarbonization, jobs, and growth.
Furthermore, in 2022 the Government of Canada released its Canadian Critical Minerals Strategy. The aim is to increase the supply of responsibly sourced critical minerals and support the development of domestic and global value chains for the green and digital economy. Why was this necessary? The reason is simple: the energy transition will require copious amounts of precious minerals and metals—and they are still in the ground.
Consider this from the strategy:
“Critical minerals represent a generational opportunity for Canada’s workers, economy, and net-zero future. They are the foundation on which modern technology is built. From solar panels to semiconductors, wind turbines to advanced batteries for storage and transportation, the world needs critical minerals to build these products. Simply put, there is no energy transition without critical minerals, which is why their supply chain resilience has become an increasing priority for advanced economies.”
– The Canadian Critical Minerals Strategy
The energy transition will require large amounts of precious minerals and metals—and they are still in the ground.
While the increase in funding is great news for the mining industry (and all industries navigating the energy transition), getting the money can be an arduous process. There are many federal, provincial, and municipal agencies that distribute funds through different programs. But some opportunities have short application windows and complex technical requirements. That’s why it can be helpful to work with a funding consultant. For more than 30 years, our team at Stantec has partnered with clients to secure over $6 billion in grant and loan funding in North America.
Let’s explore some of the new funding opportunities available for mine sites in Canada. We’re happy to help clients navigate the process.
The energy transition: Funding for decarbonization
One area where Canadian mines can access funding is decarbonization. We touched on this a little earlier. As the country continues to combat climate change and reduce greenhouse gas emissions (GHG), it is looking to foundational industries like mining to lead the pack. Why? Because mining is an energy-intensive industry. According to McKinsey & Company, it produces approximately 1 percent of global GHGs (Scope 1 and Scope 2).
Canada’s funding programs can truly change the game—especially for junior mining companies.
But the energy transition requires precious mined materials to produce renewable technologies, batteries, and more. We need them. The Canadian Critical Minerals Strategy recognizes this and is offering grant initiatives to mines that work to reduce emissions. This helps them offset costs while they transition to using cleaner, low-carbon energy. Let’s review a few of them below:
- Strategic Innovation Fund’s Net Zero Accelerator Initiative (NZA): The NZA “supports Canada's net zero goals to help transform the economy for clean and long-term growth.” The initiative will provide up to $8 billion and focus on three pillars. They are the decarbonization of large emitters, industrial transformation, and clean technology and battery ecosystem development.
- The Low Carbon Economy Fund (LCEF): The fund exists to support “projects that help to reduce Canada’s greenhouse gas emissions, generate clean growth, build resilient communities, and create good jobs for Canadians.” The fund will invest $2.2 billion over 7 years.
- The Clean Growth Fund (CGF): The CGF aims to achieve net zero carbon emissions by investing in companies with innovative solutions. It will “identify, evaluate, and invest in the most promising and ambitious companies and provide them with commercialization expertise and market access to enable rapid growth and scale-up.”
There are more grants and opportunities for mining companies that want to decarbonize. Funds exist for transitioning to electric fleets or designing charging infrastructure.
Things like renewable technologies and batteries will rely on mined materials.
Evolving technology: Funding for innovation
No doubt we can all agree that innovation is great. But mining companies often weigh tough decisions when determining whether to use a new technology. This can be true during design or when retrofitting existing operations. The first hurdle is upfront cost—there is a risk in making a big investment. The second is potential loss. How long will it take to transition to new technologies? Will there be a temporary disruption in output? These are questions mine operators must answer before committing to new technology-enhanced processes.
The good news? The Canadian government sees the benefits that come from evolving current technologies and processes. And it has allocated funds specifically for innovation. This means mine owners can lessen capital expenses. Let’s look at a few innovation funding programs in Canada:
- Sustainable Development Technology Canada (SDTC): The SDTC “finds, funds, and fosters Canadian companies that are developing, demonstrating, and commercializing new technologies.” They will help fund innovations that can help solve environmental challenges. These include climate change, the circular economy, and improving human well-being.
- Strategic Innovation Fund (SIF): The SIF was put in place to make sure that Canada is a top destination for businesses to invest, grow, and create jobs and prosperity. The hope is that SIF will spur innovation by providing funding for large projects and national innovation ecosystems.
- Mining Innovation Commercialization Accelerator (MICA): A National Network of Innovation for Mining, MICA was “designed to bridge the innovation-commercialization gaps that delay commercial success.” The goal was to use public and private sector investments to benefit the mining sector and the Canadian economy. How? By advancing made-in-Canada solutions and fostering networking opportunities.
These are only a few of the funding opportunities that mine operators can use. There are plenty of paths towards innovation that can help mining companies—and Canada as a whole.
Innovation in mining can take many forms, but innovation often results in less energy use or less waste, which has big environmental benefits.
Building bridges: Funding for Indigenous partnerships
A critical area of the Strategy is building partnerships with Indigenous communities. For a mining project to move forward, Indigenous consultation and community engagement are key.
There are plenty of ways to engage the local community. From environmental consultation to jobs to stakeholder engagement—building strong partnerships is vital. There are several funding opportunities for mining companies to improve the lives and well-being of Indigenous communities. Here are a few:
- Strategic Partnerships Initiative (SPI): The SPI is led by Indigenous Services Canada. Its goal is to “help Indigenous communities participate in complex economic opportunities.” It provides funding for clean energy projects in Indigenous, rural, and remote communities across Canada. These initiatives can span multiple years, have regional economic impacts, and serve multiple communities.
- Climate Change and Health Adaptation Program: This program “is designed to build capacity for climate change and health adaptation by funding community-designed and driven projects.” It supports projects that focus on human health and a changing climate. It also examines areas such as food security, access to safe drinking water, and the impacts of extreme weather events.
- First Nations and Inuit Summer Work Experience Program: This program “provides youth with summer employment opportunities where they can gain work experience and develop important skills.” These skills include communication, problem-solving, and teamwork. The aim is to allow youth to learn about career options, earn an income, and possibly gain a university or college education.
There are many opportunities to build partnerships with Indigenous communities across Canada. This is crucial for every industry, but it is particularly important for the mining sector.
There are many opportunities to build partnerships with Indigenous communities across Canada, especially in the mining industry.
Finding funds for your mine project
It’s clear to see there is money on the table in Canada. The federal government, alongside provincial legislature, wants to ensure Canadian mines have the necessary tools to responsibly and sustainably produce minerals identified in the Critical Minerals Strategy. Really, it would be hard to find a project that doesn’t incorporate aspects of decarbonization, innovation, jobs and growth, or Indigenous partnerships. But we are in the midst of a great transition, and some mine sites will need to better understand the evolving funding landscape within Canada and how they may capitalize on funding opportunities while prioritizing a sustainable future.
Canada’s funding programs can truly change the game—especially for junior mining companies. So, as mine operators consider enhancements to existing mines, or even developing a new mine, it would be wise to work with teams who can help navigate the many new funding opportunities.