Sask. govt lays out lithium royalty structure as demand for critical minerals grows

With lithium mining emerging as an important industry for Saskatchewan, the provincial government is working to create “a clear and consistent royalty framework” for lithium and other minerals sourced from natural brine aquifers.

The province said the amendments to legislation around subsurface mineral royalty regulations will provide more certainty for companies aiming to develop or make investments in lithium projects in Saskatchewan.

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The new framework sets a Crown royalty rate of three per cent of the value of brine mineral sales, with a “two-year holiday for new productive capacity.” The provincial government said the rate is consistent with Crown royalties for potash, salt and sodium sulphate, and is competitive with other jurisdictions that produce lithium from natural brine aquifers.

“Lithium is a critical mineral that is expected to see strong demand and growth in the decades ahead, and Saskatchewan is well-positioned to take advantage of this opportunity,” Colleen Young, Saskatchewan’s energy and resources minister, said in a statement.

“By putting this royalty framework in place now, we are providing certainty for industry, while ensuring the people of Saskatchewan benefit as this sector develops.”

The government noted that Saskatchewan is leading all Canadian provinces in mining investment, and said the province is expected to attract more than $7 billion in mining investment this year, which is more than a quarter of the Canadian total.

Gregg Smith, president of Grounded Lithium, said the move will encourage responsible resource development and employment.

“This new regulatory framework provides a reasonable royalty rate while also recognizing the significant risk and initial investment companies make in processing facilities to ultimately achieve commercial production,” Smith said, quoted in a government statement.

“Our pursuit of the most attractive geology brought Grounded Lithium to Saskatchewan, and we are pleased to be here.”

More information on Saskatchewan’s critical minerals strategy can be found on the provincial government’s website.