Canada could become one of the western world's top sources of lithium, with Australian mining companies driving their key ally on the road to battery minerals production.
"Australian companies can bring technology know-how and expertise to Canada's critical minerals sector," Canadian Environment and Climate Change Minister Steven Guilbeault told AAP.
Arcadium Lithium (recent buyer of formerly ASX-listed Allkem), Perth-based Winsome Resources and Patriot Battery Minerals are among those forging a future electric avenue from James Bay in the province of Quebec to some of the world's biggest car makers.
While Australia dreams of being a processing hub instead of a quarry, the James Bay region is attractive to investors as the projects have ready access to downstream battery manufacturing in the emerging electric vehicle supply-chain hub of Bécancour.
Mr Guilbeault said Canada expected lithium demand to grow significantly over the next decade and has listed lithium as one of the six priority critical minerals for its potential to spur Canadian economic growth.
"The James Bay region has significant potential to become a lithium mining hub in northern Quebec, due to the region's large established reserves of lithium and exploration potential for more," he said.
Canada already produces lithium from two mines located in Manitoba and Quebec and, since 2020, the government has secured over $C50 billion ($A55 billion) in automotive and battery manufacturing investments to support a sovereign supply chain.
In 2023, Australia was the largest source of foreign direct investment in Canada's mining sector, accounting for more than a third of the total $C42.4 billion ($A45 billion) spend.
Out-muscling proposed Australian incentives, mining companies can access a tax credit of 30 per cent for exploration expenses targeting specific critical minerals including lithium.
Mr Guilbeault said there was also a separate credit to cover 30 per cent of the cost of spending on new machinery and equipment used to manufacture or process key clean technologies and extraction and processing of critical minerals.
In contrast to Canada, the United States accounts for a mere four per cent of the world's lithium reserves, which are needed for advanced defence technologies as well as electric vehicles.
Australia is "deepening our collaboration on critical minerals with like-minded partners" including the United States, Josh Riley, Consul General in Canada, told the recent Fastmarkets lithium conference in Las Vegas.
Almost half of the world's lithium extraction occurred in Australia and would keep growing due to a strong project pipeline, he added.
The reporter travelled with the support of Winsome Resources.
