Canada Growth Fund (CGF) will invest about C$25-million to support Rio Tinto’s scandium oxide production in Sorel-Tracy, Québec.

The investment will expand the nameplate capacity of Rio Tinto’s facility to 9 t/y.

Scandium is used in high-performance aluminium alloys, solid oxide fuel cells and other advanced technologies. Rio Tinto’s demonstration plant, which began operating in 2022, currently supplies all North American scandium and is one of the few meaningful sources within the OECD.

“With its unique investment mandate, CGF invests into innovative transaction structures that directly support projects of strategic importance. This transaction, completed alongside an established operating partner, enables us to unlock new models for risk-sharing and value creation that advance Canada's supply chain resilience strategy,” said Yannick Beaudoin, president and CEO of Canada Growth Fund Investment Management.

“Our commitment to the project demonstrates how targeted investment and disciplined structuring can deliver tangible benefits for the Canadian industry and economy,” he added.

“We are delighted to bring PSP Investments' rigorous investment process, depth of expertise and arm's-length governance model to the execution of CGF's mandate,” said Deborah Orida, president and CEO of PSP Investments. “With today's announcement, CGF continues to provide innovative solutions that enable the development of important projects, improving Canada's investment climate, and contributing to PSP's foresight on the evolution of the critical minerals supply chain.”

“Rio Tinto is pleased to partner with CGF and the government of Canada to expand our Canadian production of scandium oxide, a high-performance material used for advanced manufacturing and energy generation,” said Rio Tinto Iron and Titanium and Diamonds MD Sophie Bergeron.

Rio Tinto has developed a process to extract high-purity scandium from waste streams at its Québec titanium dioxide operations, avoiding new mining and minimising environmental impact.

The transaction supports the G7 Critical Minerals Action Plan, which is aimed at reducing reliance on unsecure supply chains and coordinating offtake and price stabilisation mechanisms. As part of the agreement, the government of Canada will enter into commercial arrangements with Rio Tinto, including an offtake agreement and a marketing and storage agreement for scandium.