Supporting the global critical minerals supply chain

ECA collaboration is essential to accelerating project development and ensuring long-term resilience in critical mineral supply.

Global demand for key minerals used in clean technologies is surging. As Canada’s official Export Credit Agency (ECA), Export Development Canada (EDC) is focused on accelerating this transition by supporting critical minerals projects around the world that drive innovation and sustainability.

To be successful, we know we cannot go at it alone. We see incredible—and indeed necessary—opportunity for ECAs to work together on critical minerals projects. Only then will we see meaningful progress in addressing the current issues faced throughout global critical minerals supply chains.

For its part, EDC has extensive experience in critical minerals, backed by more than 30 years of involvement in mining projects. Annually, the business we facilitate in the mining and metals sector averages CAD 8 billion across 250 customers. Our expertise spans various aspects of the industry, ensuring that we provide comprehensive support to our customers. This support includes tailored loans, insurance solutions and other working capital support. We also offer companies and our partners extensive market knowledge and connections in the mining and cleantech sectors within Canada and abroad. Our deep understanding and proven track record in mining, limited recourse, and structured project finance make us a trusted partner in this field.

With our experience also come four key lessons we have learned along the way:

Investment sustainability

There is a visible investment gap that must be addressed to accelerate project development—a pattern observed both in Canada and across global markets.

Projects are finding it difficult to attract capital due to price uncertainty and volatility in global markets. Some commodities are over 40% lower than prices witnessed only two years ago. Additionally, the investment community is uncertain if the market is experiencing the low point, which makes it particularly difficult for new projects to secure financial support. The nature of equity markets is also changing, with an increase in passive equity investment putting pressure on off takers, lenders, and equity dynamics.

What we have found useful in addressing this challenge is offering longer debt terms to help our clients navigate market cycles, providing stability and confidence. Critical minerals projects face long construction periods and volatile commodity prices, affecting cash flows to projects and their equity returns. Providing a longer tenor helps to improve returns to equity holders and crowd in necessary capital.

Historically, we typically aligned our tenor with other lenders and ECAs in the ten-year range. Now, we are offering extended tenors beyond this ten-year range when the business case makes sense. ECAs can work together and collectively take a longer-term view in getting these projects off the ground by leveraging longer tenors. ECAs and investors need to create aligned, collaborative financial solutions to enable critical minerals projects to be developed faster.

International collaboration

Critical minerals projects tend to be large-scale and complex, often requiring significant financial support from both public and private funding sources. As such, EDC has made international collaboration a key pillar of our critical minerals strategy. We have signed Memorandums of Understanding to help strengthen our collaboration on critical minerals with other ECAs, including Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), Export–Import Bank of Korea (KEXIM), and Korea Trade Insurance Corporation (K-Sure). We have reached out to other ECAs with similar interests in this sector to share learnings and discuss how to address some of the challenges faced by this industry.

In October 2024, we hosted a critical minerals roundtable discussion in Canada and engaged ECAs and sponsors of critical minerals projects in Canada. Both the ECAs and Canadian project sponsors found the event helpful in fostering dialogue amongst the participants.

The roundtable facilitated the exchange of best practices, innovative solutions, and collaborative strategies to address common challenges in the critical minerals sector. It also provided a platform for building strong partnerships and exploring new opportunities for investment and development. Moving forward, we are committed to continuing these engagements and expanding our network to include more stakeholders. This kind of international collaboration is key to ensuring successful critical minerals projects.

Attendees of EDC’s critical minerals roundtable discussion. Held in October 2024 in Toronto, it included several ECAs, Canadian critical minerals experts, and major project sponsors.

Supporting offtake exports from domestic projects

Canada is one of several markets ideally positioned to be a secure, reliable producer of critical minerals that are essential to the growing digital economy and the transition to net-zero emissions. These minerals include, but are not limited to, lithium, nickel, cobalt, iron ore, and graphite. We play a role in supporting Canadian companies and projects involved in critical mineral supply chains, not only internationally but domestically as well. Canada also boasts a strong mining supply chain, with Canadian companies providing products and services to mining companies and operations around the world.

We have found that supporting domestic projects not only helps to get these projects off the ground but strengthens the supply chain and know-how of companies increasing their global competitiveness in international projects. EDC’s support of Canadian projects is based on the export of the offtake to foreign markets.

Environment, Social, and Governance (ESG) considerations

The critical minerals industry as an extension of the mining sector has traditionally experienced ESG challenges, particularly in the areas of environment and human rights. At EDC, we apply rigorous ESG standards to our support to help mitigate these risks. Our ESG screening and due diligence is guided by international standards including the Equator Principles and the OECD Common Approaches. Our in-house ESG team is composed of a seasoned group of environmental, social, and financial crimes specialists with relevant mining experience. We are committed to fostering sustainable practices and ensuring that the projects we support contribute positively to the communities and environments in which they operate. We believe that responsible business practices are not only essential for long-term success but also for building a resilient and sustainable supply chain.

As we look to the future, EDC is excited about the opportunities that lie ahead and is dedicated to fostering strong partnerships in this industry. Collaborative efforts are key in enhancing the resilience of the critical minerals supply chain. The industry needs ECAs to take on more risk to enable the faster development of critical minerals projects. EDC is looking forward to collaborating with like-minded institutions to ensure a sustainable and secure supply of critical minerals.