EDC on the cusp of playing bigger role in funding Canada’s mining sector

Export Development Canada is poised to play an even bigger role in funding this country’s mining sector, against a backdrop of enormous uncertainty caused by the global trade war and the need for the industry to further diversify internationally.

The Crown corporation, founded in 1944, has been in the mine-financing business for decades. EDC provides loans, credit insurance, performance bonds and occasionally participates in equity deals. Last year, EDC provided $7.6-billion in assistance to the Canadian mining industry.

Both the Liberals and the Conservatives have committed to building more mines as part of their election platforms. Investing in critical minerals has already been a priority for EDC over the past few years after Canada released its strategy for critical minerals in 2022.

“We are actively speaking to many of the developers that are in the later stages of mine development to see if there’s a way for EDC to participate,” said Al Pritchard, EDC director of sectors, mining, who heads its critical-minerals strategy.

“We are as eager as anyone to see those projects come online.”

Among the Canadian critical-minerals companies that EDC is currently looking at lending to is Toronto-based Canada Nickel Co. Inc., which plans to build a giant nickel-cobalt mine near Timmins, Ont.

Canada Nickel hopes to secure a $500-million loan from EDC that would make a major dent in the roughly US$2-billion that is needed to build the mine.

“It’s a project that we hope to support,” Mr. Pritchard said.

EDC is also working closely with Canadian steel and aluminum producers as both sectors grapple with punishing tariffs. U.S. President Donald Trump in March imposed 25-per-cent tariffs on Canadian aluminum and steel imports.

While the Canadian mining sector was largely spared from Mr. Trump’s tariffs, as long as they are compliant with the U.S.-Mexico-Canada Agreement, anxiety is high that duties in certain sectors, such as copper, could come eventually.

Amid this uncertainty, the EDC is doubling down on its efforts to help Canadian mining companies further diversify their supply chains, so as not to be overly reliant on the U.S. market.

In addition to funding domestic mining companies, EDC lends to international miners in the hope of winning business for Canadian companies through those lending relationships.

“We’re using our leverage with an international relationship to help Canadian companies diversify into new markets,” said Mr. Pritchard.

Chile, which has the world’s largest copper industry, is a major area of focus of those efforts. Export Development Canada is a lender to some of Chile’s biggest copper producers. EDC recently sent a team to a major mining convention in Chile. There, EDC is connecting Canadian companies, such as drillers, with Chilean producers.

“There’s a live technical opportunity and these Canadian companies are fully capable of executing,” he said.

While EDC functions as a quasi-bank, it is able to take on more risk than a private-sector lender, and potentially offer larger financing packages at longer terms. It can also get involved in poorly understood and not widely-followed subsets of mining, such as rare earths. That’s partly owing to it employing experts, such as mining engineers who conduct due diligence on potential financing packages.

Among the mining companies that EDC has helped finance are Turquoise Hill Resources, Lundin Mining Corp., Champion Iron Ltd., Generation Mining Ltd., and Wheaton Precious Metals Corp.