Critical minerals research, development and demonstration program – Letter of interest applicants’ guide

Contents

1. 1. Introduction
   1. 1.1 Critical Minerals Research, Development and Demonstration
   2. 1.2 Document scope
2. 2. Program overview
   1. 2.1 Program objectives and scope
   2. 2.2 Expected outcomes
      1. Tracking outcomes
   3. 2.3 Eligibility
      1. Technology readiness level
      2. Targeted critical minerals list
      3. Part of the value chain
      4. Eligible funding recipients
      5. Eligible project location
   4. 2.4 Eligible expenditures
   5. 2.5 Funding allocation
3. 3. Submission details
   1. 3.1 Submission process
   2. 3.2 LOI preparation
   3. 3.3 Submission timelines
   4. 3.4 Key milestones
4. 4. Evaluation criteria
5. Appendix. Technology readiness levels

1. Introduction

1.1 Critical minerals research, development and demonstration

Under Budget 2021, Natural Resources Canada (NRCan) received $ 47.7 million to support developing value chains for Canadian critical minerals. This investment is in recognition that critical minerals are essential inputs for renewable energy and clean technology applications. Such applications include

• advanced batteries
• permanent magnets
• solar panels
• wind turbines
• advanced manufacturing supply chains, including defense and security technologies
• consumer electronics
• critical infrastructure

The Critical Minerals Research, Development and Demonstration (CMRDD) program includes budget of $10.95 million for contributions funding for pilot plants and demonstrations projects. They will help the development of critical minerals value chains that will contribute to Canada’s goal of being a net-zero emitter of carbon by 2050. The pilot plants and demonstration projects will focus on moving technologies along the technology readiness level (TRL) scale between TRL 6 and 8, as defined in the appendix. At these TRL levels, the program will help advance the development of products, processes and technologies to the pre-commercialization phase, which is a critical gap in technology development for the overall innovation ecosystem of critical minerals mining. 

1.2 Document scope

This program and applicant guide provides details on the CMRDD program, including program objectives, eligibility and the selection process. The funding process has two stages: the letter of interest (LOI) stage and the full project proposal (FPP) stage. This guide contains instructions for only the LOI stage. An FPP guide for the full project proposal will be available only to applicants who are successful at the LOI stage.

2. Program overview

2.1 Program objectives and scope

The CMRDD program aims to advance the commercial readiness of emerging processing technologies that will support the development of value chains for zero emission vehicles (ZEV) in Canada. The program will provide raw material inputs for use in batteries and permanent magnets. 

Production of these raw materials can stem from primary (e.g. ore deposits) or secondary sources. Secondary sources include mine and processing wastes (e.g. tailings) and recycling of post-consumer wastes.

The CMRDD program seeks to validate the feasibility, viability and reproducibility of processing technologies by conducting pilot demonstrations. Both the complete process flow sheet of a technology or a designated circuit or unit operation within the flow sheet can be considered as a potential project for pilot funding under this program. At the level of funding indicated, it is anticipated that most funded projects will focus on piloting of key circuits rather than complete flow sheets.

Projects applying for funding must clearly identify the main objectives of the pilot operation, such as validating efficiency and recoveries, economic improvements, product purity, or environmental footprint. The proposed pilot projects should be conducted at sufficient scale and duration and be designed to fully address all key design parameters of the technologies, including temperature, recycle streams, and reagent addition etc. Issues such as material handling, health and safety, impurity build-up, and process control should be carefully considered in the pilot design. This is necessary to ultimately provide fundamental process design and engineering information to demonstrate the feasibility, viability and reproducibility of the technologies toward commercial deployment.

Under current funding, all projects and reporting must be completed by March 31, 2024.

2.2 Expected outcomes

Projects that are funded by this program are expected to improve the feasibility, viability and reproducibility of producing these critical minerals raw materials. They will accomplish this through novel technologies and innovative process design and will support the environmental and social performance of their production over the baseline or conventional process routes. Examples include, but are not limited to:

• Improved capital and/or operating costs of critical minerals production through innovative and improved technologies or new flow sheets that shorten conventional processing
• Effective production of critical minerals from an unconventional source such as tailings, recycled waste, slag, dross or other secondary sources
• Reduced energy intensity, carbon intensity or other environmental performance indicators in critical minerals processing

Tracking outcomes

Following a successful LOI and FPP stage, successfully funded projects will be required to report on expected outcomes to ensure that targets and objectives are being met. Since outcomes may be realized only after funding has ended, provisions have been made for ongoing data collection and assessment for three years following the project completion date. 

2.3 Eligibility

Technology readiness level

The program will support only projects that advance pre-commercial technologies between TRL 6 and 8. The application must clearly demonstrate that the technology falls within these TRLs. For TRL definitions, see the appendix.

Targeted critical minerals list

The program will focus on the critical minerals nickel, cobalt, lithium, graphite, manganese and vanadium and on the specific rare earth elements of neodymium, praseodymium, dysprosium, gadolinium, and terbium.

Part of the value chain

Projects that will be considered for funding must be classified as upstream processing. The limits for the purposes of this program start immediately following primary crushing, continue through the processing cycle, and end at pre-cursor material and element production.

In the case of battery minerals, this includes (but is not limited to) production of nickel and cobalt sulfates but does not include battery pack and cell design and manufacturing. In the case of permanent magnets, as an example, this includes production of separated rare earths metals and alloys but not the production of permanent magnets.

Eligible funding recipients

Eligible funding recipients may include:

1. Legal entities validly incorporated or registered in Canada, including:
   • For-profit and not-for-profit organizations such as mining companies , industry associations, research associations
   • Indigenous organizations and groups
   • post-secondary institutions 
2. Provincial, territorial, regional and municipal governments and their departments and agencies
3. Indigenous groups:
   • Indigenous communities or governments
   • Tribal Councils or entities that fulfill a similar function (e.g. general council)
   • National and regional Indigenous councils and tribal organizations
   • Indigenous (majority-owned and -controlled by Indigenous people) for-profit and not-for-profit organizations

For the purposes of this document, the term “Indigenous” is understood to include Inuit, Métis, First Nations, Status Indian and non-Status Indian individuals.

Eligible project location

Technology solutions can originate from anywhere globally, but must be tested, piloted, demonstrated and deployed in Canada.

2.4 Eligible expenditures

Eligible expenditures for an approved project must be directly related to, and necessary for, the implementation and conduct of a project and will include the following items.

Eligible expenditures

Salaries and benefits for employees on the payroll of the recipient for the time spent by the employees on the project

Training and workshops

Professional, scientific, technical and contracting services

Travel expenditures, including meals and accommodation, based on National Joint Council Rates

Capital expenditures such as the purchase, installation, testing and commissioning of qualifying equipment, materials and products, including diagnostic testing tools and instruments and original equipment manufacturer equipment warranties (including extended warranties where deemed appropriate to mitigate risk and lack of capacity)

Other expenses, including: laboratory and field supplies and materials printing services and translation data collection services, including processing, analysis and management facility costs for seminars, conference room rentals, etc. construction Insurance accreditation licence fees and permits training field testing services

When the recipient is an Indigenous organization, other expenses may include: costs associated with an Indigenous ceremony (excluding hospitality) honoraria for Elders

Overhead expenditures, provided they are directly related to the conduct of the project and can be attributed to it. Overhead expenditures can be included in the total project costs to a maximum of 15 percent of eligible expenditures. Overhead expenditures include: Administrative and corporate support provided directly to the project by the recipient’s employees, valued on the same basis as professional staff time Routine laboratory and field equipment maintenance, based on the actual expenditure to a recipient Office operating expenses directly related to the conduct of the project (e.g. faxes, telephone, photocopies) Costs associated with further distribution of funding A predetermined overhead percentage may be set and subsequently applied to each claim to avoid unnecessary administrative burden to funding recipients. The percentage will be based on evidence provided by the recipient of expected overhead expenditures at the time of negotiating a contribution agreement.

GST, PST or HST, net of any tax rebate to which the recipient is entitledFootnote 1

2.5 Funding allocation

The total funding available under the current CMRDD program is $10.95 million.

Pilot plants and demonstration projects

The CMRDD program may pay up to 75 percent of total project costs for for-profit recipients and 100 percent for all other recipients for each pilot plant and demonstration project. It is expected that good quality projects will request between $500,000 and $3 million. However, the maximum funding that can be provided under this program per project is $5 million.

Although the program may pay up to 100 percent of total project costs per project, it is generally expected that the program will contribute an average of 50 percent.

Note, the CMRDD program will provide non-repayable contributions for eligible research, development and demonstration projects.

3. Submission details

3.1 Submission process

NRCan is committed to a consistent, fair and transparent project selection process to identify, select and approve the allocation of funding to projects that best fit the CMRDD program’s objectives.

For the LOI stage, applicants can find all information necessary to start preparing their LOI in this guide. The CMRDD program will be open for LOI submissions as of May 11, 2022. Applicants may contact the program if they need further clarity on the expectations at criticalmineralsrdd-minerauxcritiquesrdd@nrcan-rncan.gc.ca.

An applicant may withdraw their LOI at any stage of the evaluation process, by notifying NRCan in writing via email (criticalmineralsrdd-minerauxcritiquesrdd@nrcan-rncan.gc.ca). Applicants must submit an LOI to be eligible for submission of an FPP.

The LOIs will be assessed based on the criteria provided in chapter 4, with only the most promising projects moving on to the FPP stage. The program may request supplementary information at various points in the review process.

Those applicants who are invited to the FPP stage to submit an FPP will be notified of the required templates and information. The applicant must provide all mandatory information to be considered for funding.

Note that a request for an FPP does not represent a funding commitment from the CMRDD program.

3.2 LOI preparation

When preparing an LOI, applicants must gather the following information:

• Applicant information – primary contact, mailing address, and organization information
• Project information – type of critical minerals, description, development status of the technology, and TRL (including adequate justification to support that level), focus area, project type, project details, project timelines
• Budget and partners – total funding requested divided into major categories, including capital, labour, consumables and overhead, and all anticipated financial and non-financial partners
• Project summary – project team, alignment with the scope of the program, the technical gap being addressed, methodology, innovativeness, uptake potential, environmental impact, economic and/or social impact
• First Nations inclusion and any modern treaty obligations

A detailed breakdown of the evaluation criteria is provided in chapter 4 of this guide.

3.3 Submission timelines

The deadline for submission of LOIs in response to this call is 12:00 p.m. (NOON) EDT on June 17th, 2022. Late submissions will not be accepted. Applicants are encouraged to complete their submissions well in advance of the deadline. Furthermore, NRCan will not accept partial or incomplete submissions.

Applicants will receive an automatically generated email confirming receipt of the LOI.

3.4 Key milestones

May 11, 2022	Call for letters of interest opens
June 17, 2022	Deadline for LOI submissions
July 11, 2022	Call for full project proposals opens
August 26, 2022	Deadline for FPP submissions
September 23, 2022	Projects selected
October 25, 2022	Contribution agreements signed

Note: NRCan reserves the right to change the application process and deadlines at its sole discretion. NRCan will notify applicants of any changes to the process by email and necessary accommodations for the changes provided.

4. Evaluation criteria

The LOI application will be assessed based on the following eight criteria. Special consideration will be given to projects that identify the participation of Indigenous groups or individuals to support increased economic development opportunities for Indigenous communities in the natural resources sectors.

ADDRESSING A GAP
Provide a clear statement of the technology and the main objectives (i.e. knowledge gaps) that the pilot project will achieve. (300 words)	When answering this question, consider the following: Does the project identify the objectives of the project and address how they will be achieved? Does the project identify, with rationale, how those achievements could potentially lead to further advancements, demonstrations or commercial deployment?
PROJECT TEAM
Detail the roles, capability and capacity of your organization and any collaborators to undertake the work over the duration of the project and provide continued support at completion. (300 words)	When answering this question, consider the following: Do the project manager, technical/scientific team, and partner organizations have the ability or capacity to deliver the project over the lifetime of the project? Does the team have the required expertise to perform this project?
ALIGNMENT WITH SCOPE
Provide a clear statement of how the project addresses the scope and the priorities of the CMRDD program. (100 words)	When answering this question, consider the following: Does the project align with the scope?
METHODOLOGY
Describe how the project will be carried out, including a high-level description of the design, tasks and methodology. (300 words)	When answering this question, consider the following: Does the project have a well-developed methodology? Does it describe how the project will be carried out, including a high-level description of the design, tasks and methodology? Is the methodology set out logical and viable?
INNOVATIVENESS
How is the proposed project innovative or novel? Provide context on similar projects already being undertaken in Canada and elsewhere and describe how this project is different. (300 words)	When answering this question, consider the following: Is the project sufficiently novel or innovative? Will the project produce a clear advancement of the proposed technology?
UPTAKE POTENTIAL
Who are the anticipated recipients of the products in Canada and abroad, and what is the replicability or uptake potential of the project? Is this something that solves a broad problem across the sector? (300 words)	When answering this question, consider the following: If the project is successful, are there clear opportunities for future uptake and replication within Canada?
ENVIRONMENTAL IMPACT
Describe the potential environmental impacts if the project is successful. Focus on the direct and indirect environmental impacts from the technology and the products that will be produced. (200 words)	When answering this question, consider the following: If the project is successful, are there environmental impacts to be considered, and do they address the overall environmental objectives of the program?
ECONOMIC AND/OR SOCIAL IMPACT
Describe the potential economic and social impacts if the project is successful (e.g. reduced costs, new revenue streams, job creation, public confidence support) (200 words)	When answering this question, consider the following: Are the proposed economic and/or social impacts of the project significant? Do they address the economic goals of the program? How are First Nations consulted and/or affected?

Appendix. Technology readiness levels

Technology readiness levels (TRL) zero to nine are a measure used to assess the maturity of an evolving technology (devices, materials, components, software, work processes, etc.) during its development and, in some cases, during early operations.

Generally speaking, when a new technology is first invented or conceptualized, it is not suitable for immediate application. Instead, new technologies are usually subjected to experimentation, refinement, and increasingly realistic testing. Once the technology is sufficiently proven, it can be incorporated into a system or subsystem.^{Footnote 2}

The lowest readiness level, TRL 1, indicates that information already learned from basic scientific research is taking its first step from an idea to a practical application of a lesson learned. For example, after learning that hydrogen and oxygen can be combined to generate electricity, someone would suggest an idea for building a machine to do just that.

A technology that has achieved TRL 9 is one that has been incorporated fully into a larger system. It has been proven to work smoothly and is considered operational. An example of an operational TRL 9 technology is the fuel cells that combine hydrogen and oxygen to generate electricity for the NASA space shuttle.^{Footnote 3}

Technology readiness level descriptions

0

R&D that is not intended specifically for technology development (but could be in support of technology adoption). Examples are knowledge generation to support codes, regulations and standards needed to support domestic adoption and to support Canada’s position in opposing non-tariff export barriers. This also includes basic research conducted before applied research.

1

Early-stage scientific research begins the translation to applied R&D – the lowest level of technology readiness. Basic scientific research begins to be translated into preparatory applied R&D. Examples include paper studies of a technology’s basic properties, algorithms and mathematical formulations.

2

Technology development begins. After basic principles are observed, the development of practical and specific applications can start. Applications are speculative, and there may be no proof or detailed analysis to support the assumptions. Examples are limited to analytic studies, including concept development.

3

Active R&D is initiated. Active R&D starts to establish proof of concept, including analytical and laboratory studies to physically validate analytical predictions of separate elements of the technology, i.e. individual components that are not yet integrated into the technology.

4

Basic technological components are integrated to establish that the pieces will work together, i.e. initial operational characterization of technology. Stand-alone component prototypes are implemented and tested.

5

System and subsystem prototypes are improved significantly. The basic technological components and prototypes are integrated within a reasonably realistic supporting environment so that the technology concept can be tested in a simulated environment. Examples include bench-scale laboratory integration of components and observation of operating characteristics.

6

A model or prototype is tested in an appropriate environment. A representative model or prototype system that is well beyond TRL 5 is tested in a relevant test environment. This scenario represents a major step up in a technology’s demonstrated readiness. Examples include testing a prototype at the pilot scale, integrated with existing systems, if applicable, in a laboratory environment or in a simulated operational environment. Engineering feasibility is demonstrated.

7

A prototype is ready for testing in an operational system – This is a major step up from TRL 6, requiring demonstration of an actual system prototype in the intended operational environment. Examples include field testing or field trials over a period sufficient to provide meaningful data on the performance of the technology.

8

The technology is proven to work in a “real world” operating environment. An actual technology has been completed and qualified through testing and demonstration. This includes projects currently at the demonstration project stage.

9

The system is proven though successful demonstration. Actual application of technology is in its final form – commercialization-ready technology proven through successful operations.