How is Teck Supporting Strategic Canadian Metals Production?

Global markets have borne witness to significant levels of volatility throughout the years. Materials shortages, trade tensions and increasing innovations has increased pressure on production companies around the world.

The demand for critical materials is increasing every day, with lithium, copper, cobalt and nickel being some of the core resources being used more than ever across smartphones, semiconductors and electrification technologies. 

With this comes a need to change tactics, as rising geopolitical tensions leads to trade uncertainties. In a strategic attempt to boost production, Teck Resources is expanding its Trail Operations facility, with help from the Canadian government.

Growing capabilities

Recent years have driven an intense boost in critical materials production – ongoing demand for smartphones boosts the need for lithium, cobalt, silicon and tantalum, wind turbines need copper, steel and rare earth elements, including neodymium and terbium.

The IEA has identified 37 critical minerals which are used in aerospace, energy infrastructure and smartphones, but there is no universally accepted number or definition for these materials.

Much of these materials are processed or mined in a limited space. China controls the majority of rare earth elements, responsible for approximately 60% of mining output and more than 90% of refining capabilities. 

Canadian resource company, Teck, has a focus on ensuring responsible provisions of essential metals which are vital to the energy transition. Alongside Canada Growth Fund and the Canada Critical Minerals Accelerator – introduced by Natural Resources Canada to accelerate the production of critical minerals – Teck has announced a Strategic Investment Agreement to grow production capabilities for critical minerals.

Teck's Trail Operations smelting and refining complex in British Columbia, also known as Trail, will be expanding production capacity for germanium, gallium and antimony. Already, the complex oversees the production of 19 products and is one of the world's largest fully integrated polymetallic smelting and refining complexes. 

Now, with a potential for an investment, Teck could see the enhancement of processing capacity, solidifying Canadian critical materials supply chains. 

“Canada has what the world wants, and we are moving decisively to catalyse private investments, secure our supply chains and get projects built faster so we can provide for ourselves and our global partners,” says Tim Hodgson, Canada's Minister of Energy and Natural Resources. 

“Our new Canada Critical Minerals Accelerator is about turning Canadian resource abundance into real projects by giving industry the certainty they need to invest and grow, even in a volatile global market. By working with companies like Teck and partnering with Canada Growth Fund and Export Development Canada, we are using every tool in our toolbox to build Canada Strong.”

Critical materials demand

The agreement establishes an opportunity for an investment of up to CA$400m (US$282.1m) from CGF, which will go directly into the Trail facility. This could be part of a wider CA$850m (US$599.5m) potential total investment by Teck to grow critical minerals processing at the facility, gained from various feed sources. 

It also allows for the creation of an offtake structure with the Government of Canada, with offtake rights for future germanium, antimony and gallium which will be produced by Trail. These will help establish Canada as a reliable supplier of critical materials to partners around the world. Through this Canada is developing greater resilience and self-sufficiency, moving itself away from reliance on China.

“Leveraging its unique expertise and ability to implement bespoke structured financial instruments, CGF’s investment will support the advancement of the expansion of Canada’s only germanium-producing smelter, a critical mineral essential to applications related to national security,” says Yannick Beaudoin, President and Chief Executive Officer of Canada Growth Fund Investment Management Inc.

“CGFIM is pleased to once again put its experience to work in support of the Government of Canada’s establishment of a third offtake agreement that positions Canada as a reliable partner of choice for global partners seeking access to important critical minerals.”

The parties are working to advance Trail's Strategic Metals Initiative, aiming to double the production capacity for germanium and antimony. Germanium is currently used to make fibre optic cables, firefighting equipment, solar panels, semiconductors and radar systems. Antimony is an essential material in many flame-retardants, and is used in storage batteries and acts as a semiconductor dopant. 

Teck is also hoping to add new gallium production capacity – this material is a key material in semiconductors used in telecommunications, radar systems and modern electronics. 

Due to the demand for AI hardware and DRAM, global semiconductor demand is at an all-time high. As a result, the need for materials like germanium and antimony is growing exponentially. If Canada can create a reliable supply for these materials, it will strengthen its economic and national security. Moreover, it will help meet the demand of and stabilise the clean technology and energy transition. 

“Teck’s Trail Operations is a cornerstone of North America’s critical minerals ecosystem. Collaboration with CGF and the Canada Critical Minerals Accelerator will help advance the opportunity we have to quickly and significantly increase production capacity for key strategic metals and help strengthen secure, responsible supply chains,” adds Jonathan Price, President and CEO of Teck.

“By leveraging Trail’s existing infrastructure and expertise, this initiative has the potential to deliver new supply of strategic metals while providing strong returns for Teck shareholders.”

Supply chain resilience

The agreements between the Government of Canada and Teck act as the inaugural transaction under the Canada Critical Minerals Accelerator. The Trail Strategic Metals Initiative has been named by the Province of British Columbia as one of the eighteen priority resource projects. 

“EDC is focused on helping strengthen Canada’s role as a reliable supplier of critical minerals to global markets,” says Alison Nankivell, President and CEO of Export Development Canada.

“These materials play an essential role in defence, security and advanced technologies. By leveraging EDC’s financing expertise and supporting projects like Trail, in collaboration with Teck, Natural Resources Canada and the Canada Growth Fund, we can help expand production capacity here in Canada and build more secure and resilient supply chains for our partners.”

Canada is aiming to enhance global supply chains with its critical material production capabilities, focusing on growing the Canadian industry. Through this investment, Trail will be able to better adapt to evolving market demands and aid long-term stability for the country. 

The agreement remains subject to conditions, with negotiation and definitive documentation still set to take place. Once completed, it could help drive more resilience in western critical materials supply chains.