TORONTO (Reuters) – Canada’s move to expand the investment tax credit for mining companies to align it with policies in the United States is accelerating funding talks for critical miners, company executives told Reuters.

Prime Minister Justin Trudeau’s government proposed a 30% investment tax credit for expenses related to the exploration of critical minerals in the latest budget announced last month. This incentive also covers investors planning to buy shares in certain critical mining companies such as those in the exploration of lithium brine.

Company executives say the new measures would help bring in new equity investors who stayed away from the mining sector due to volatile capital market conditions. An early-stage exploration project typically needs between C$10 million ($7.4 million) to C$25 million, according to industry estimates.

“These provisions are going to be of huge help to attract investments,” said Mark Selby, CEO of Canada Nickel Company Inc (CNC.V).

Since the budget announcement, Selby said Canada Nickel’s ongoing discussions for a potential partnership with an unidentified Korean battery maker have accelerated thanks to the specific measures. The TSX Venture Metals and Mining Index is up 4% (.GSPJX151040) since the budget, compared with a 2.7% rise in the broader market (.GSPTSE).

Canada is trying to match the incentives announced by the United States under the Inflation Reduction Act which offers a combination of tax credits and government loans worth $40 billion to support critical mineral projects.

Canada is home to half of the world’s mining companies and is seen as a premium destination for junior miners to raise capital, according to The Toronto Stock Exchange.

Chris Doornbos, CEO of Alberta-based E3 Lithium (ETL.V), said the government’s proposals open up a whole new funding option for junior miners in Canada that was not available before. E3 Lithium is working on the exploration of lithium from brines in Calgary.