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Canada has announced 25 critical minerals investments and partnerships with allies as it races to develop C$6.4bn (US$4.6bn) worth of projects to counter China’s dominance of the global trade.
The government on Friday announced the investments and offtake agreements, which would underpin the projects, following two days of talks in Toronto with other G7 countries.
Canada’s energy minister Tim Hodgson said Ottawa would use the country’s Defence Production Act to stockpile critical minerals. The move echoes the US’s use of national security legislation to strengthen its domestic supplies.
“This enables Canada to launch our own defence stockpiling regime, and to support multilateral stockpiling efforts,” Hodgson said.
G7 nations met this week in Toronto to develop a so-called buyers club as part of a critical minerals production alliance that seeks to restore multilateralism at a time when countries such as Australia and Japan have negotiated rare earth deals with the US.
The announcements come as Canada tries to position itself as a crucial supplier to western economies that have grown concerned about China’s stranglehold on rare earth and critical minerals supplies.
US President Donald Trump and China’s leader Xi Jinping struck a deal earlier this week to settle a dispute over Beijing’s restrictions on exports of rare earths, minerals critical to global manufacturers, in particular defence. But the agreement is for one year only and leaves China as the dominant supplier.
The White House has stepped up its buying of critical minerals, which are vital for smartphones, electric vehicles and fighter jets.
The EU is also racing to develop stockpiling strategies as anxieties remain about China’s control of supply chains.
Dan Jørgensen, the European commissioner for energy and housing, said fostering international co-operation on critical raw materials among G7 countries was an important development.
“Responsible and secure supply chains are a shared strategic asset, not a competitive zero-sum game,” he said on Friday.
Canada’s critical minerals investments come as part of its increased Nato defence spending commitments, which Trump has criticised as too low.
According to the announcement, Norway’s Vianode would build a multibillion-dollar synthetic graphite plant in Ontario to supply anode materials for EV batteries while Rio Tinto’s scandium plant in Sorel-Tracy, Quebec, also secured multilateral support.
As part of the deal Canada will guarantee to buy the producers’ output at a pre-determined price, helping to guarantee a return on upstream investment.
Nouveau Monde Graphite has acquired offtake arrangements with Japan’s Panasonic and Luxembourg-based Traxys, as well as a pledge of investment from the Canadian and Japanese governments.
Ottawa has also sought to spur more critical minerals mining in some of Canada’s deposits across the country.
Earlier this month, Teck Resources said it was in talks with the US and Canada about supplying minerals used in defence.
Hodgson told the G7 conference this week: “We’ve been working closely with Teck to expand capacity at their Trail smelter in British Columbia to produce niche minerals like germanium and gallium and antimony, where mechanisms like stockpiling or floor pricing will be necessary to proceed to a construction decision.”
China dominates the supply chain for rare earths and imposed sweeping export controls this year that escalated tensions.
Additional reporting from Camilla Hodgson in London