Canada announced on Friday the first round of projects under a G7 critical minerals production alliance, designed as a counterweight to China’s dominance in the sector.
The 25 initiatives include offtake agreements for a graphite mine in Quebec and investments to expand a rare earth elements refinery in Ontario.
Canada’s Minister of Energy and Natural Resources said the alliance’s first initiatives should be seen as a clear sign that the group is serious about reducing market concentrations, safeguarding national security and boosting investment.
“As we move rapidly to reduce reliance on concentrated supply chains, our collective commitment is clear. Every delay is a concession of economic and national security interests. We will no longer accept that,” Minister Tim Hodgson said.
China is a major miner of critical minerals and an even bigger refiner, with an average market share of 70 percent for 19 of 20 key minerals, according to the International Energy Agency. For rare earth elements, which are difficult to mine and are used to make powerful magnets found in everything from electric vehicles to advanced radar systems, their position is even more dominant, accounting for 91 percent of global refining output.
In recent months, the country has taken advantage of that position to tighten export limits on such minerals, increasing pressure on G7 ministers to advance talks on how to diversify their supply chains during their two days of meetings in Toronto this week.
Receive the latest national news
For news affecting Canada and around the world, sign up to receive breaking news alerts directly as it happens.
Temporary relief came just before talks began on Thursday, when China agreed, as part of a deal with the United States, to suspend export controls on some rare earth minerals for a year.
However, the US energy secretary suggested in Toronto that this still underlined the need for the G7 to establish its own capacity to extract and process its own minerals.
“China, frankly, simply used non-trade practices to drive the rest of the industry, the rest of the world, out of manufacturing those strategically influential products. Everyone sees that now,” Secretary Chris Wright said at a news conference Friday.
The slew of investments announced at the G7 meetings included offtake agreements for Nouveau Monde Graphite’s Matawinie mine near Montreal. The mine purchase agreements, an agreement to buy some of the mine’s future production, came from the federal government, Panasonic and Traxys, a Luxembourg mining company.
Hodgson also announced that Canada is 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.
The Vianode company announced in January that it had signed a multi-million dollar supply agreement with General Motors for its electric vehicles.
Graphite is a key component of lithium-ion batteries used for electric vehicles and broader energy storage systems.
A Ucore Rare Metals facility in Kingston, Ont., also received conditional approval for up to $36 million in federal money to help expand 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.
Demand for minerals key to decarbonizing the economy is expected to increase in the coming years. A Canadian Climate Institute report earlier this year estimated that Canada would need capital investments on the order of $30 billion by 2040 just to meet domestic demand.
Wolfgang Alschner, a professor at the University of Ottawa, said Canada appeared to have successfully used this week’s G7 talks to put itself at the center of the minerals discussion. But he also noted that the ads seemed “more project-focused than policy-focused.”
“There is still a lot of policy work to be done,” particularly on market standards, said Alschner, who studies Canada’s international critical minerals strategy.
© 2025 The Canadian Press
