Raising capital in Canada’s junior mining sector has been getting progressively harder over the past decade, but with one of the key sources of patient capital virtually eliminated, the job is now significantly more difficult…A little more than two years ago, Ottawa said it would only allow Canadian critical minerals companies to raise money from Chinese state-owned enterprises under exceptional circumstances. The policy is an attempt to rein in China’s control over critical minerals. The Asian superpower dominates the supply chains for electric battery minerals such as cobalt, graphite and lithium. China routinely uses its power to crush foreign competition…In 2021, TSX Venture-listed mining companies raised US$2-billion. That was less than a third of the US$6.2-billion peak in 2009, according to data from LSEG Data & Analytics. But after Ottawa’s clampdown on Chinese investment in 2022, the slide went into freefall. As of mid-November, juniors had raised just US$400-million on the TSX Venture year-to-date… It seems far more probable that those commodities will be sourced from countries such as China and Indonesia, where environmental standards are far below those in Western nations…Over the past few years, Ottawa under its critical minerals policy has provided unprecedented amounts of money for companies that are at the very early exploration stage, and for those that are at a late stage of mine development…But there is little public money available for companies such as FPX that are in the middle of The Lassonde Curve, a graph created by legendary mining financier Pierre Lassonde that represents the ups, downs and plateaus in the life cycle of a typical mining company…Well before Ottawa put new restrictions on raising foreign capital, junior miners were struggling to attract interest owing to the slow-motion death spiral in active money management, Mr. Selby said…He wistfully remembers the golden era of mine financing in the mid to late 2000s. Back then, a small Canadian mining company with a promising project could hit the road for a few days and meet with fund managers in charge of billions of dollars in assets in Toronto, Montreal and Vancouver. Then, when the company launched a “bought deal” financing, it knew there would be more than enough appetite from fund managers…Doug Pollitt, veteran mining analyst with Toronto-based brokerage Pollitt & Co., pins the decline in active management largely on investors switching into passively-managed exchange-traded funds…ETFs, by contrast, track indexes. There is no human manager for a small mining company to meet to pitch its story to… “It’s not who’s got the best mine, or which CEO has a great track record. There’s an algo based on market cap and trading volume. That’s the basis of the investment.”…These investments are a major bright spot for the industry and the pool of strategic buyers over the past few years has widened beyond large mining companies to include the end users of critical minerals, such as battery makers and auto manufacturers. General Motors Co., for example, has invested close to US$1-billion into Vancouver-based Lithium Americas Corp. , which is building a lithium mine in Nevada…Over the past couple of years, Ottawa and Washington have jointly provided tens of millions in grants for Canadian critical minerals projects. In some cases, the amounts being awarded are not far off the market value of the company, or even above it…Fortune Minerals Ltd. a cobalt, gold and bismuth development company based in London, Ont., with a market value of $28-million, received $16.2-million in government funding earlier this year…More aggressive trade measures are part of the solution, as well as better co-ordination between the United States and Canada. In May, the U.S. imposed steep tariffs on many critical minerals imported from China, including graphite, cobalt, aluminum and nickel used for steel production. Canada followed in October with tariffs on steel and aluminum products. Ottawa stopped short of imposing tariffs on a bigger basket of critical minerals, as the U.S. has done, but has left the door open to doing so at some point…Ottawa could also broad access to a niche capital raising tool that only a small subset of companies have access to. Flow-through shares have been the go-to method for exploration-stage mining companies to raise money in Canada for decades, owing to the tax advantages to the purchaser…But flow-through shares can only be issued when the proceeds are put toward early exploration work. Mr. Turenne and Mr. Selby have both petitioned the federal government to allow flow-through shares to be issued for other uses, such as advanced exploration, engineering studies for mines, metallurgical test work and costs related to engaging with First Nations, all expenses faced by development companies in the middle of the Lassonde Curve…

The Australian government on Monday will introduce legislation to implement production tax incentives for renewable hydrogen and critical minerals to help boost investment in the sector, which could play a major role in energy transition plans…The proposed law will set up a tax incentive worth 10% of relevant processing and refining costs for 31 critical minerals from the fiscal year ending June 2028 to the 2039-40 fiscal year, for up to 10 years per project, the government said…"The legislation will give investors clarity and certainty to invest in Australia's potential to add more value to its natural resources, and help deliver cheaper and cleaner energy," Treasurer Jim Chalmers said in a statement…Major economies are seeking to invest billions to support clean energy projects and compete with China in manufacturing electric vehicles and semiconductors, seen as vital for prosperity and national security.

The Democratic Republic of Congo's state miner Gecamines is offering $1 million to buy cobalt and copper assets of indebted mining firm Chemaf to prevent China from increasing its control of critical metals in the country, two sources familiar with the details told Reuters…Chemaf, a partner of commodities trader Trafigura, agreed to sell its copper and cobalt assets to Chinese defence and industrial giant, China North Industries Corp, or Norinco in June. Gecamines, which owns the lease to Chemaf's mines, whose copper and cobalt are used in electric vehicles and clean energy infrastructure, was asked by Chemaf to approve the sale, but declined…Gecamines later submitted an unsolicited bid for the Chemaf assets, deepening a standoff that has been complicated by U.S. officials lobbying against China's grip on the mineral-rich central African Copperbelt…Chinese companies are major investors in Congo's mining sector. CMOC Group is now the world's biggest cobalt miner as it boosts output at Tenke Fungurume Mine it bought from U.S.-based Freeport-McMoRan just four years ago…Chemaf, whose debts have ballooned to $900 million to $1 billion, needs an additional $300 million to expand output and operate profitably, the sources said…Norinco has offered between $900 million and $1 billion, including settling Chemaf's debts and outstanding taxes, one of the sources said…The Chinese miner also pledged to advance Chemaf's plans to raise copper and cobalt output to about 75,000 metric tons and 25,000 tons, respectively, the source added…Norinco's move has drawn scrutiny by the U.S., with State Department officials lobbying Congo to block the deal, three sources told Reuters…Chemaf entered into a 24-month creditors' protection agreement in August 2023 that lapses next year…U.S. officials are also rallying Western companies to consider buying the Chemaf assets, the sources said.