The Canadian government has conditionally approved a non-repayable grant of up to C$16.7 million for First Phosphate Corp. (CSE:PHOS, OTCQX:FRSPF, FRA:KD0, OTC:FPHOY), a Quebec-based mineral developer, to advance work on producing battery-grade phosphate concentrate for the lithium iron phosphate battery market.
The funding comes through Natural Resources Canada, the federal department overseeing the country's resources sector, under its Global Partnerships Initiative, which supports projects aimed at strengthening critical mineral supply chains.
Lithium iron phosphate, commonly known as LFP, is a battery chemistry widely used in electric vehicles and energy storage systems. It relies on high-purity phosphoric acid derived from phosphate concentrate as a key input, and supply of that material is currently dominated by producers outside North America, principally in China.
First Phosphate said the contribution will fund detailed technical and engineering work to validate its ability to produce phosphate concentrate that meets the quality standards required by LFP battery manufacturers, based on specifications agreed with its offtake customer. The company did not identify the customer.
The grant covers eligible activities through to 2028 and is tied to First Phosphate's integrated phosphate concentrate project in the Saguenay-Lac-Saint-Jean region of Quebec, where the company's flagship Bégin-Lamarche property holds what it describes as a rare North American igneous phosphate deposit characterised by low levels of impurities.
The broader aim of the programme is to establish a scalable Canadian process for producing battery-grade phosphate concentrate and, ultimately, to support the development of a domestic phosphoric acid facility, reducing reliance on overseas supply.
Tim Hodgson, Canada's minister of energy and natural resources, said the funding was part of a wider effort to build secure and resilient critical mineral supply chains for both economic and defence purposes.
Armand MacKenzie, president of First Phosphate, said the government contribution would allow the company to carry out the detailed validation work required to meet the expectations of its offtake partners and international customers.