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VANCOUVER, British Columbia (Reuters) - The Canadian government said on Wednesday it will use its green energy fund to help pay for a power project that backers hope will expand mining in British Columbia.
The federal government will provide up to C$130 million ($121 million) to help build the C$400 million Northwest transmission line, a 335-km (210-mile) project that could be ready for construction next year, Prime Minister Stephen Harper's office said.
Backers of the project, which has been under consideration for several years, have said expanding British Columbia's power grid into the sparsely populated region could spur the development of more than C$3.5 billion in mining investments in the northwest.
Among the projects that could benefit is the Galore Creek copper-gold mine being developed by Teck Resources and NovaGold Resources Inc.
Ottawa said the project qualified for money from its new Green Infrastructure Fund because it would also spur development of alternative energy projects and would reduce the use of diesel generators in the area.
British Columbia needs to expand production of electricity from hydro and wind projects to meet its pledge to reduce carbon emissions.
The provincial government has committed to put up to C$250 million into the project, so it will still need to secure some additional private funding.
Reporting by Allan Dowd; editing by Rob Wilson