Projects seek to cut China's mineral dominance
Canadian and international firms are set to gain from a new wave of investment under the G7 Critical Minerals Production Alliance, as Ottawa unveils projects totaling C$6.4 billion.
The list includes offtake deals for Quebec’s Nouveau Monde Graphite, financing for Norway’s Vianode to build a graphite plant in Ontario, and $36 million in support for Ucore Rare Metals’ rare-earth processing facility in Kingston.
The 25 projects represent the first phase of initiatives launched under the alliance, which was presented at the conclusion of the two-day G7 energy and environment ministers’ meeting in Toronto. The program is part of efforts by Canada and its partners to secure stable mineral supply chains and reduce market concentration in production and refining.
Energy and Natural Resources Minister Tim Hodgson said the announcement signaled that the group is intent on reducing dependence on concentrated supply chains and advancing investment. “Every delay is a concession of economic and national security interests. We will no longer accept that,” he said.
Nouveau Monde Graphite’s Matawinie mine near Montréal is included in the set of new agreements, with offtake deals signed by the federal government, Panasonic Corp., and Luxembourg-based Traxys. The Vianode project in St. Thomas, Ontario, could receive up to $500 million in financing from Export Development Canada to build a synthetic graphite facility. Vianode earlier signed a multibillion-dollar supply agreement with General Motors for electric-vehicle battery materials.
In another initiative, Ucore Rare Metals Inc. received conditional approval for up to $36 million in federal funding to expand processing of samarium and gadolinium, rare-earth elements used in nuclear reactors, magnets, and medical imaging systems.
According to the International Energy Agency, China holds roughly 70 % of the global market share for 19 out of 20 critical minerals and about 91 % of rare-earth refining capacity. In recent months, Beijing tightened export limits on several of these materials, which prompted G7 ministers to seek ways to diversify sources of supply.
Temporary relief came ahead of the Toronto talks when China agreed with the United States to suspend certain export controls for one year. However, U.S. Energy Secretary Chris Wright told reporters that the pause does not remove the need for the G7 to develop its own mining and processing capabilities. He said China had relied on non-market practices to suppress other producers and gain strategic advantage.
As part of the alliance, Canada also signed offtake agreements for scandium and graphite with Rio Tinto. The new projects are expected to fast-track production of graphite, rare-earth elements, and scandium through a mix of public and private capital under the C$6.4 billion framework.
Demand for critical minerals tied to electric vehicles and renewable technologies is projected to rise sharply. The Canadian Climate Institute estimated earlier this year that the country would require about $30 billion in capital investment by 2040 to meet domestic needs.
University of Ottawa professor Wolfgang Alschner said Canada successfully positioned itself in the G7 minerals discussion but noted that much of the progress so far is “project focused, rather than policy focused.” He added that significant work remains on setting market standards and long-term governance for the alliance.
