March 13 (Reuters) - Canadian miner Hudbay Minerals ( HBM )

said on Wednesday that Japanese trading house Marubeni ( MARUF )

will invest up to C$12 million ($8.90 million) across

exploration activities at three of the miner's projects.

Once the funding and some other obligations are met, the two

firms could also form a joint venture under which Marubeni ( MARUF ) would

gain 20% interest in the three mining projects located within

trucking distance of Hudbay's processing facilities in Flin

Flon, Manitoba, the company said.

The agreement follows a memorandum of understanding the

companies signed in July.

The agreement would allow Hudbay to explore its large Flin

Flon land package to potentially bring another mine into

production and utilize its idle processing infrastructure in the

region, Hudbay CEO Peter Kukielski said.

Canada is home to a large mining sector for minerals such as

lithium, nickel and cobalt and has been wooing firms involved in

all levels of the electric vehicle (EV) supply chain.

However, it has also tightened foreign investment rules for

the critical minerals sector over national security concerns and

had forced three Chinese investors to sell their stakes in

Canadian mineral companies in 2022.

($1 = 1.3486 Canadian dollars)