Canada Pushes for Critical Minerals Alliance
Canada is ramping up efforts to create a minerals alliance with its allies, specifically aiming to reduce reliance on China for critical resources like lithium, uranium, and rare earths. The move is part of a broader global race for resource security and supply chain sovereignty.
Canada's push for a critical minerals alliance is backed by substantial new investment, with a recent announcement committing over $3.6 billion in programs and funding to develop domestic resources from "mine to market." This includes up to $165.2 million for 22 specific projects across eight provinces, intended to accelerate planning and processing capacity. The strategy includes major new funding vehicles to de-risk and build out the domestic supply chain. A $1.5 billion "First and Last Mile Fund" is being launched to build essential infrastructure like roads and power transmission to new mines, while a $2 billion "Critical Minerals Sovereign Fund" will make strategic equity investments to get key projects to a final investment decision faster. This initiative, known as the Critical Minerals Production Alliance, was launched during Canada's G7 Presidency in 2025. A recent second round of partnerships has brought the total mobilized capital to $18.5 billion across 30 new partnerships with 12 allied countries, including G7 members, Australia, Norway, and Ukraine. The alliance directly challenges China's deep-rooted control over global mineral supply chains. China currently dominates the production of numerous critical minerals, accounting for an estimated 79% of global graphite production, 99% of gallium, and 69% of rare earths, while also refining approximately 90% of the world's rare earth elements. These efforts build upon Canada's foundational Critical Minerals Strategy, launched in 2022, which has already seen domestic production increase by over 10% for nine critical minerals, including graphite, lithium, and uranium. The government has also entered into specific offtake agreements, such as with Rio Tinto for scandium and Nouveau Monde Graphite for graphite, to secure domestic supply. The focus extends beyond mining to include the entire value chain, from processing to recycling, aiming to create a fully integrated domestic industry. Projects receiving investment include those developing innovative, low-carbon methods to recover nickel and cobalt from mine tailings and initiatives to expand rare earths processing capabilities. This minerals strategy is explicitly linked to national security and defense. Canada is working with NATO on the joint acquisition and stockpiling of defense-critical raw materials and has designated certain minerals as a national security priority under the Defence Production Act to ensure supply for Canadian and allied defense industries. Domestically, a coalition of western provinces and territories, including British Columbia, Alberta, and Saskatchewan, has signed an agreement to develop a unified regional strategy. This aims to leverage their rich deposits of lithium, copper, and rare earths to create a robust value chain and increase exports to new markets.
