Canada's federal budget, which is scheduled to be presented on Thursday, will include investment of at least C$2 billion for the critical minerals programme, Reuters reported two senior government sources as saying.
The investment would aim to increase production of critical minerals which include lithium, nickel, cobalt and magnesium.
This decision will allow increased US government funding for research and feasibility studies into critical minerals mining projects.
A broad array of firms developing critical minerals in the US have firmly backed Biden's decision which is aimed at reducing US import dependency of critical minerals, primarily from China. Shares in many firms involved in the lithium and graphite sectors in the US rallied on the news.
Previous programmes in Canada aimed at boosting critical minerals funding have typically been on a province by province basis.
Ontario last month unveiled its critical minerals strategy for 2022-2027 which was focused on its nickel, cobalt, lithium and graphite potential.
Other critical minerals that have either been produced in Ontario, or that occur in deposits currently being developed, include barite, chromite, fluorspar, magnesium, molybdenum, niobium, phosphate and tungsten.
In 2020, exploration firms spent a total of C$206 million on critical minerals exploration projects in Ontario.
Toronto-listed Avalon Advanced Materials announced on April 4 that it had signed a binding letter of intent with RenJoules International, a subsidiary of Indian conglomerate Essar, to become a strategic partner and co-developer to establish a regional lithium battery materials supply chain and a lithium refinery in Ontario.
The planned lithium refinery in Thunder Bay will be designed to accept lithium minerals concentrates from Avalon's Separation Rapids lithium project in the province but also from other new producers from the many lithium pegmatite resources that occur in northwestern Ontario.
Avalon estimates demand for lithium battery materials produced in Ontario support an initial production capacity for the refinery of 20,000 tonnes per annum of lithium hydroxide and/or lithium carbonate. This will require a capital investment of around C$500 million.
The Ottawa government last month announced support for two facilities to make battery materials for EVs but there has to date been little direct national government funding of mining or refining for critical minerals.
Any budget allocation of around CS$2 billion is likely to be welcomed by project developers in the critical minerals sector but not financially sufficient to lead to the fast track development of a series of new critical minerals mines.
Canada's finance ministry declined to confirm whether the reported investment would be in this week's federal budget.
