Canada has officially identified 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 a buyer and setting a minimum price. The announcement took place during a G7 energy and environment meeting in Toronto, where discussions centered on countering China’s dominant position in critical mineral production. These minerals are crucial for modern technologies such as electric vehicles and clean energy, prompting Western nations to address concerns over China’s control of the supply chain.
Canada’s Energy Minister Tim Hodgson emphasized the importance of establishing demand certainty and pricing stability to facilitate the development of mines and processing facilities. At the G7 meeting, Hodgson revealed that G7 countries would invest $6.4 billion in 26 critical mineral projects across Canada to bolster the domestic mining sector and reduce dependence on Chinese minerals.
Among the funded projects are Nouveau Monde Graphite’s Matawinie mine near Montreal, Rio Tinto’s Scandium production plant in Sorel-Tracy, Quebec, and Torngat Metals’ Strange Lake project involving rare earths. The government has maintained confidentiality regarding the price floor for purchasing these minerals due to security and commercial considerations.
To combat China’s dominance in critical minerals, Canadian companies require state intervention to prevent price undercutting by Chinese suppliers. Pierre Gratton, President of the Mining Association of Canada, highlighted the challenges faced by Canadian projects in securing financing and competing with Chinese prices.
Hodgson has been engaging with G7 counterparts to establish a critical minerals production alliance, aiming to create a “buyers club” within the group of industrialized economies. This initiative seeks to invest in critical minerals projects, set price floors, and establish long-term buying agreements to enhance production capabilities in Western countries. The move reflects global concerns over China’s significant role in the critical minerals supply chain, with the country dominating the refining of strategic minerals.
Canada possesses abundant critical minerals, presenting a substantial economic opportunity if responsibly developed. According to Eyab Al-Aini, a senior research associate at the Canadian Climate Institute, Canada’s untapped resources, including priority minerals like copper, lithium, graphite, cobalt, nickel, and rare earths, could experience a surge in demand. The analysis suggests that Canada’s domestic demand for critical minerals could reach $16 billion annually by 2040, primarily driven by the local battery production industry and the increasing shift towards clean technologies.
The evolving landscape of global energy investments towards clean technologies underscores the vital role of critical minerals in meeting future demands for sustainable energy sources like solar and wind power.
