Canada has officially classified specific critical minerals as a national security priority under the Defence Production Act. This decision enables the federal government to provide support to the mining industry by ensuring it a purchaser and a minimum price. The announcement was made during a G7 energy and environment meeting in Toronto, where countries deliberated on countering China’s significant control over critical mineral production vital for technologies such as electric vehicles and clean energy.
Energy Minister Tim Hodgson emphasized the necessity for establishing demand certainty and pricing stability to facilitate the construction of mining and processing facilities. He disclosed that G7 nations would be investing $6.4 billion in 26 critical mineral projects across Canada to bolster the domestic mining sector and create alternatives to Chinese minerals.
Some of the projects receiving funding include Nouveau Monde Graphite’s Matawinie mine near Montreal, Rio Tinto’s Scandium production plant in Sorel-Tracy, Que., and Torngat Metals’ Strange Lake project in Quebec. The exact price floor for purchasing these minerals remains confidential for security and commercial reasons.
To combat China’s dominance in critical minerals, Hodgson has been engaging in discussions with G7 counterparts for several months to establish a new critical minerals production alliance or a “buyers club.” This initiative aims to secure investments in critical mineral projects within the bloc, which will assist in setting price floors and long-term buying agreements, ultimately supporting critical minerals production in Western countries.
China currently leads in refining 19 out of 20 strategic minerals, holding an average market share of 70%. As the demand for these critical minerals escalates in technologies like battery-electric vehicles and solar panels, concerns grow over China’s expanding global control of the supply chain. Canada, possessing abundant critical minerals, sees a significant economic opportunity in responsibly developing these resources to meet the rising demand for clean technologies.
Analyzing six priority minerals—copper, lithium, graphite, cobalt, nickel, and rare earths—the Canadian Climate Institute projects a substantial growth in demand for these minerals. By 2040, Canada’s domestic requirement for critical minerals alone could reach $16 billion annually, primarily driven by a burgeoning local battery production industry, surpassing fossil fuels in clean technology investments.