Ottawa to invest up to $400 million in Teck critical minerals smelter in B.C.

The federal government says it will invest up to $400 million into Teck Resources Ltd.’s critical minerals processing operations in southern B.C. as Ottawa looks to shore up supplies of metals used in the defence and green energy sectors.

“We are facing a trade war we did not ask for. We’re facing the most volatile geopolitics since the end of World War II, which has led to the biggest energy crisis in modern history. We face technological change at a pace not seen in decades, mainly due to the advent of AI. And we face an accelerating clean energy transition that needs critical minerals,” Tim Hodgson, the federal natural resources minister, said in Trail, B.C., on Tuesday.

“Anyone who tells you facing these challenges as a government, or as a nation, is not daunting is not telling the truth.”

But Hodgson said the crises are creating an opportunity for Canada.

“We are doing this because it’s an increasingly dangerous and volatile world where access to critical minerals can be weaponized against someone. Making sure that Canada has the ability to produce its own critical minerals is of huge economic interest to our country,” he said in an interview.

“We want to make sure Canada always has the cards. We never want to be in a situation where someone’s telling us ‘you have to do what we want because you have no cards.’ These are great cards. We should make sure we have them.”

The announcement is the first under the Canada Critical Mineral Accelerator, a Natural Resources Canada program set up last year to speed up development of minerals it says are needed for economic sovereignty, national security and the energy transition. Export Development Canada manages the accelerator.

The smelting and refining complex in Trail currently produces 19 products and employs more than 1,400 people. Teck is planning an up to $850-million expansion to the facility that could double production of germanium and antimony and start producing gallium.

Germanium is used in fibre optic, infrared and semiconductor technology, while antimony is crucial for flame retardants, batteries and alloys. Gallium is key for semiconductors used in telecommunications, radar and electronics.

Canada and its G7 counterparts have compiled lists of critical minerals they consider vital to their national security and economic sovereignty. Ottawa has been working to match up those minerals with operations that mine and process them here, and where federal investment could help spur private sector investment, Hodgson said.

The agreement could see the Canada Growth Fund, a federal arm’s-length cleantech investment vehicle, make an “equity-like investment” of up to $400 million directly into the Trail facility, Natural Resources Canada said in a release.

“It’s structured so that we take a return off the margins of the expansion,” Hodgson told reporters. “And it’s specifically designed to not get in the middle of the capital structure of Teck, but to make sure that Canadian taxpayers benefit from the opportunity that’s being created here.”

Hodgson said the exact terms of the deal, which he also described as a “royalty-type structure” are “commercially confidential” given some of the national security implications.

The agreement could also see Ottawa obtain rights to a portion of future production of those minerals. Before the startup of the accelerator, it had done so with graphite and scandium mines in Quebec, Hodgson said. Under such agreements, minerals can be stockpiled to meet Canada’s own national security needs, with supplies potentially available to G7 partners on “commercially appropriate terms.”

For the minerals that would be produced in the Trail expansion, the markets are quite small so prices can vary wildly, Hodgson said, adding the government funding helps give industry the certainty it needs to ensure they’re produced.

“It’s hard for a private sector company to say, ‘I’m going to invest hundreds of millions of dollars in producing these when I don’t know whether another market participant might purposely flood a market and drive down the price to make it uneconomic, I don’t know that I want to commit that capital.'”

Jonathan Price, Teck’s chief executive, said the agreement will help the company quickly and significantly increase production of key strategic metals.

“This expansion would turn Trail operations and Canada into the go-to supplier of these metals for customers and nations worldwide,” he said at the news conference.

He said timelines for the expansion have not been worked out.

“This is a complex major project, but we are certain that based on the financing agreements that we expect to put in place in the coming months that we will be able to accelerate the project and accelerate the production accordingly.”

Teck and London-based Anglo American PLC announced a deal last year to join forces and create a $70-billion copper-focused mining powerhouse. The combined company is to be called Anglo Teck and keep a headquarters in Vancouver.

When the deal was announced last September, Anglo American said it expected the transaction to close within 12 to 18 months. Hodgson said both Teck and Anglo have committed to keep up the Trail agreement post-merger.

This report by The Canadian Press was first published July 7, 2026.

Companies in this story: (TSX:TECK.B)

Lauren Krugel, The Canadian Press