Canadian Prime Minister Mark Carney has just returned from a trip to the United Arab Emirates (UAE), where he extracted a $70 billion investment pledge from the Gulf state.
The funding is expected to include energy, AI logistics, mining and other strategic industries.
Fed up with Donald Trump’s tariffs, Canada’s new government is on a mission to double non-US exports over the next decade and unleash $1 trillion in new investment in Canada over five years, according to a Nov. 21 press release.
In conjunction with the UAE announcement, Carney said Ottawa is working on a $1-billion project aimed at expanding critical minerals processing capacity in Canada.
“I’m pleased that an agreement valued over $1 billion is in the process of being finalized,” Carney said in a speech to the Canada-U.A.E. Business Council covered by CBC News.
“[It] will expand critical minerals processing capacity in Canada, creating jobs, boosting [the] long-term supply of minerals essential to energy technologies and advanced manufacturing. More on that soon,” he said.
Rhetoric aside, where does Canada, a relatively small country in terms of mineral refining capacity, stand in terms of developing enough capacity to become independent of China, the leading refiner of critical minerals? Is Canada even globally relevant?
According to the International Energy Agency, China has an average market share of 70% for 19 out of 20 key minerals. For rare earth elements, it accounts for 91% of global refining production.
In 2024, China held a 96% share of global refined graphite, 78% of the world’s refined cobalt, 70% of its lithium, and 44% of its copper.
Despite a long mining history, Canada is really only a major miner of two commodities. It is the world’s largest producer and exporter of potash and the second-largest producer and exporter of uranium. While Canada is among the top 10 producers of cobalt, graphite, lithium and nickel — all now considered critical minerals — it accounts for only 5% of the global mine production of each of these minerals.
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Staying with mine production for the minute, Australia accounts for 37% of total world lithium production. Indonesia is the top nickel miner at 59% of the world total, China mines 69% of the world’s rare earth elements and 79% of its graphite, and the DRC accounts for about three-quarters of world cobalt mine production. (Mineral Commodities Summary 2025, by the US Geological Survey)
China’s near-monopoly on critical minerals processing gives it serious heft in trade relations. In recent months, Beijing has leveraged its position to tighten export restrictions on minerals, including rare earths, graphite, antimony, gallium and germanium.
Canada has established domestic infrastructure for processing minerals such as aluminum and uranium, and has a few smelters and refineries for copper, nickel and zinc. But for the key energy-transition metals like lithium and rare earth elements, refining capacity is currently minimal or non-existent.
Canada’s first rare earths refinery was opened in 2024 in Saskatchewan. At full operation, the CAD$74 million facility is expected to produce 400 tonnes of NdPr metals per year, used to make permanent magnets.
By comparison, China in 2024 produced 83,697 tonnes of NdPr metal.
The United States is the primary export destination for 52% of all Canadian mineral exports and 63% of critical minerals. The latter are concentrated in the upstream stages of the value chain, meaning that further processing often occurs after export.
Canada certainly has ambitions to grow its critical minerals supply chain, from mining to refining to the manufacture of end products. The Canadian Mineral Minerals Strategy was published by the Canadian government in 2022, underscoring the need to secure and diversify supply chains.
Canada’s critical minerals list contains 34 minerals deemed essential for economic or national security.
According to a recent piece by HillNotes, Securing critical minerals supply chains entails, among other measures, identifying the parties involved in extracting and processing critical minerals in this country… While foreign direct investment plays a crucial role in supporting this sector, concerns have been raised about foreign ownership of these resources.
Maps embedded into the article show that 30 of Canada’s 55 critical mineral mines are owned by companies whose parent company is based in Canada. For the other 25 mines, their parent companies are based in Brazil, the United States and Switzerland. The Tanco mine in Manitoba, which produces cesium, tantalum and lithium, is 100% owned by a Chinese company.
Canada is home to 45 advanced graphite, lithium and REE projects. Thirty-one are owned by a Canadian-domiciled company.
Only eight of the 32 critical mineral processing centers are owned by Canadian companies. The other 24 are owned by parent companies that reside in the United Kingdom, the United States, Switzerland, Brazil, France, Germany and Luxembourg.
At the end of October the Canadian government announced the first round of projects under a G7 critical minerals production alliance envisioned as a counterweight to China’s dominance in the sector.
According to Global News, the 25 initiatives include offtake agreements for a Quebec graphite mine and investments to scale up a rare earth elements refinery in Ontario.
Nouveau Monde Graphite’s Matawinie mine near Montreal secured agreement to buy part of the mine’s future production from the federal government, Panasonic and Traxys, a Luxembourg mining company.
Canada is also backing a Norwegian company’s plan to build a synthetic graphite plant in St. Thomas, Ontario, with up to $500 million in potential financing from Export Development Canada.
Graphite is used in the anodes of electric vehicle batteries. Vianode from Norway said in January it has signed a multi-billion-dollar supply deal with GM for its electric vehicles.
Global News said A Ucore Rare Metals facility in Kingston, Ont., was also conditionally approved for up to $36 million in federal money to help scale up its processing of two rare earth elements — samarium, used to make heat-resistant magnets in nuclear reactors, and gadolinium, a component of nuclear reactors and MRIs.
The refinery is expected to begin production in 2026.
Global demand for critical minerals is expected to increase significantly, with some estimates suggesting the energy sector’s needs could grow sixfold by 2040. Will Canada be ready to meet the challenge by growing its domestic mining and refining capacity?
The numbers are daunting. Global News cites a report the Canadian Climate Institute that estimated Canada would need capital investments in the range of $30 billion by 2040 to meet domestic demand alone.
One area of potential growth is rare earth elements.
“Canada has some of the largest known reserves and resources of rare earths in the world,” the manager of government relations at the Saskatchewan Research Council said in 2022.
The USGS quantifies that with an estimated 830,000 tonnes of rare-earth oxide equivalent reserves in 2024. Compare this to China’s 44 million tonnes and Brazil’s 21 million tonnes.
Another CBC News article says it’s estimated that Canada has more than 14 million tonnes of rare earth oxides, with 21 mining projects in various stages of development, from exploration to resource estimation. The projects are in the Northwest Territories, Quebec, Ontario, Newfoundland and Labrador, Alberta and in Saskatchewan, according to Natural Resources Canada.
But Canada only has one producing rare earths mine, Nechalacho in the Northwest Territories. The country’s first REE mine is owned by Cheetah Resources, a subsidiary of Vital Metals, which processes the ore in Saskatchewan before being sent to Norway for separation.
China has thousands of mines, and while the number of rare earth mines is not publicly available, it hosts the largest REE mine in the world, the Bayan Obo mine in Inner Mongolia.
In 2024 China’s rare earths production reached 270,000 tonnes, which was more than two-thirds of the world’s total, reports Investing News Network and Statista.
Canada’s REE production does not even register on the USGS’s 2024 mine production table.
Despite the government’s best intentions, Canada has a long way to go in both the mining and refining of critical minerals if it ever wants to become relevant — let alone break free of dependence on China.
By Andrew Topf for Oilprice.com
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