Canada moves forward critical race for rare earth metals; may leave China behind

Canada is pitching itself as a potential alternative for the numerous European governments seeking to reduce their reliance on China for the production of vital raw materials used to make products like electric cars.

The G-7 member, with Canada having one of the greatest resources, announced a plan to increase the production of these minerals in December. Around 15.1 million metric tonnes of rare earth oxide are thought to exist in Canada.

In addition to pushing efforts for a more sustainable economy, the European Union and other nations strive to be less reliant on China. From a European standpoint, authorities are concerned that Beijing would use its hegemony in raw materials in a manner similar to how Russia began weaponising gas against the bloc.

Mary Ng, Canada’s minister of foreign trade, told CNBC on Tuesday, “We’ve seen that the robustness of supply chains really matters, and the way in which minerals may be mined will really matter.

The Canadian government is working to expedite the clearance process for new facilities since, according to official data, it might take a mining project between 5 and 25 years to become operational.

More generally, some governments are beginning to understand that the security of their countries now depends on the availability of minerals and other raw materials. Because of Russia’s invasion of Ukraine, the European Union has realised how dependent it has become on just one large supplier.

The president of the European Commission – Ursula von der Leyen, stated this earlier this month when speaking in Canada: “We observe now that, for example, China generates 98% of Europe’s supplies of rare earth. And this dependency needs to be de-risked in Europe.

“If I look at one data that was recently released, Canada is now number two in the battery ecosystem sector,” Ng responded to the question of whether Canada was eager to dethrone China as the major provider of essential materials for the planned green transition in the West.

She added that Ottawa was number five in these rankings “not that long ago” and that it was now second only to China.

“Canada wants to contribute to finding a solution. The building of a resilient supply chain across the Atlantic is undoubtedly something that we are doing,” she said, continuing, “We currently collaborate in the fields of hydrogen and essential minerals.”