Saskatchewan has introduced a new royalty framework for lithium production, marking a major step toward supporting the province’s growing role in Canada’s critical minerals sector.

The amendments to The Subsurface Mineral Royalty Regulations, 2017 formally establish a 3 percent Crown royalty on the value of brine mineral sales, coupled with a two-year holiday for new productive capacity.

Provincial officials said the change aligns Saskatchewan’s royalties for lithium with those already applied to potash, salt, and sodium sulphate, and keeps the province competitive with leading jurisdictions worldwide.

“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,” Energy and Resources Minister Colleen Young said.

“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,” Young added.

Industry participants welcomed the move, calling it a clear signal that the province intends to be a serious player in the global lithium supply chain.

Canada-based explorer EMP Metals (CSE:EMPS,OTCQB:EMPPF) described the rate as internationally competitive and a meaningful boost for project economics.

“This is very welcome news. The government of the province of Saskatchewan has once again proven itself to be supportive of lithium production in the province,” EMP Metals CEO Karl Kottmeier said. “This is a highly competitive royalty rate internationally, and a two-year royalty holiday on new production immediately makes a positive impact on financial modelling of what is already a compelling business case for our Project Aurora lithium production project.”

Grounded Lithium (TSXV:GRD) President and CEO Gregg Smith also noted that the policy encourages further investment while recognizing the high upfront costs of developing processing capacity.

“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.

Saskatchewan has emerged as one of Canada’s top destinations for mining investment. The Fraser Institute’s Annual Survey of Mining Companies ranked it the country’s leading jurisdiction, with the province projected to attract over US$7 billion in mining investment this year — more than a quarter of Canada’s total.

The lithium framework also aligns with the province’s broader Critical Minerals Strategy, launched in 2023 to position Saskatchewan as a key contributor to Canada’s resource independence and energy transition.

The plan targets a 15 percent share of national mineral exploration by 2030, the doubling of critical mineral production, and the expansion of existing potash, uranium, and helium output.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.