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Written by: Aidan Jonah

Western governments are obsessively determined to cut their reliance on Chinese critical minerals, instead of ending their harassment of China and respecting its’ sovereignty, a Globe & Mail report has revealed. [ORIGINAL/UPDATED and ONLINE]

Claiming “non-market policies and practices [socialism] in the critical minerals sector threaten our ability to acquire many critical minerals”, the G7’s draft document says they’ll focus on “anticipating critical minerals shortages and… diversifying and onshoring, where possible, mining, processing, manufacturing, and recycling”.

Is it a fluke that this draft document comes from a G7 summit hosted in Canada? Likely not, given Canada’s imperial self-interest in growing its domestic mining industry, which requires an immense amount of capital, which the debt-ridden US is happy to provide for warmongering purposes.

To make this possible, the strategically developed ‘China threat’, manufactured through the Chinese ‘foreign interference’ paranoia, has already provided the bedrock of one Canadian province’s new law allowing for suspension of provincial and municipal laws in certain ‘special economic zones’.

Chinese dominance in critical minerals

Yet that is a dreamy aim, given the sheer dominance China has in critical minerals. According to the Financial Times, China had 70 per cent of rare earth mining production, processing 87 per cent and refining 91 per cent of rare earth metals. To top it off, 94 per cent of permanent magnets, “a key component of wind turbines and EV motors”, are made in China.

Mining Technology notes “According to data from the International Energy Agency (IEA), China accounts for approximately 80% of natural graphite and 60% of mined magnet rare earths.” MT cites Dasgupta to state that China “produces 99% of battery-grade graphite, more than 60% of lithium chemical, 40% of refined copper, over 80% of refined magnet rare earths and 70% of refined cobalt today, while also dominating the entire graphite anode supply chain end-to-end.”

One Chinese mine alone, the Bayan Obo mine, “now accounts for around 50 per cent” of rare earth minerals/reserves production, and “contains 70 per cent of the world’s known rare earth element reserves.” The largest US supplier is the Mountain Pass mine in California with “14 per cent of global rare earth mining production”, but it is the country’s only domestic supplier.

After Trump imposed exorbitant tariffs on China during his Liberation Day crusade launch, China began imposing export controls on crucial rare earth minerals. According to Metal Miner, this included: “Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium and Yttrium.” These are “vital for products ranging from electric vehicles to wind turbines, humanoid robots and fighter jets.” FT noted that “Beijing is also considering a ban on intellectual property exports for magnet-making technology.”

Western and Indian corporations have been in a blatant state of fear, shown by recent reporting by the Financial Times.

The US military industrial complex is also facing challenges, given that the rare-earth minerals and magnets needed for warplanes such as the F35 are majority sourced from China, which now requires buyers “to guarantee that they [rare-earth minerals and magnets] will be used for civilian purposes, only”.

In Sweden, rare-earth minerals mining could possibly reach first production in 5-7 years at best, with the more realistic expectation being a 10-15 years timeline, “if licensing can be sped up” and no substantial domestic resistance comes along.

This leads to fear and desperation among Western corporations, which then produces attempts at rare-earth minerals/magnet smuggling, which China has recently taken further actions to crack down upon.

How would Canada benefit from G7 move to cut reliance on China?

Canada’s position as a junior partner in Western imperialism is showcased by its mining relationship with the US.

Canada is a relevant supplier of rare-earth minerals, and the US elite funded Center for Strategic and International Studies (CSIS) thinks “Canada May Be the United States’ Best Hope for Minerals Security”.

In 2020, the Canada and U.S. Joint Action Plan on Critical Minerals Collaboration was finalized. The plan was meant to advance “our mutual interest in securing supply chains for the critical minerals needed for important manufacturing sectors, including communication technology, aerospace and defence, and clean technology.” Canada’s then-Minister of Natural Resources specifically mentioned “rare-earth elements” as a target for future ‘secure access’.

This indicates Canada was well aware there’d be a more brazen push to reduce Western reliance on Chinese critical minerals, rather than a push to engage in good faith with China to guarantee continued supply of lower-cost minerals and metals.

CSIS noted that “To date, the United States has invested more than $70 million in Canadian critical minerals projects under the Defense Production Act (DPA).”

In 2023, Canada was the number one country/region in the Top U.S. Minerals and Metals Import Partners list, at $46.96 billion USD.

Canada has three major rare-earth element projects, two in Québec and one in Saskatchewan. The Saskatchewan Research Council (SRC) is especially notable, having recently signed an MoU with REalloys, a US firm “which supplies high-performance rare earth magnets to defense contractors”.

In a recent report CSIS focused on five critical minerals Canada has underground, which are important for ‘defense technologies’: “gallium, niobium, rare earth elements, cobalt, and tungsten”. China has a heavy role in the mining of these minerals, something the US wants to break.

The Canadian Broadcasting Corporation (CBC) noted that Canadian companies who take money under the US DPA could then be obliged to give these supplies to the US for market rate, before any other customer. To back this up, the CBC notes that “a clause in Canada's own version of the Defence Production Act, which gives the government the power to buy raw materials on behalf of a NATO ally.”

CSIS sees Canada as crucial to this aim as it “holds some of the largest REE reserves in the world and is expanding its ability to process these elements.” One Canadian province, Ontario, is chomping at the bit to join hand-in-hand with the US for mining. Back in January, Premier Doug Ford proposed a Fortress Am-Can with the US “to accelerate strategic resource development, including Ontario’s critical minerals in the Ring of Fire region”.

Ford said:

“Ontario and Canada have critical minerals in abundance and America needs them. At a time when China is winning the race to dominate these resources while also restricting the sale and shipment of critical minerals to the U.S., Canada and Ontario need to urgently get our critical minerals out of the ground, processed and shipped to the factory floors that are building for the future.”

Then, this month, the Ontario legislature approved Bill C-5, ‘Protecting Ontario by Unleashing Our Economy Act’, which allows the government to “create special economic zones, where cabinet can exempt companies or projects from having to comply with any provincial law, provincial regulation or municipal bylaw.”

In blunt terms, the corporate and financial elites’ usage of the ‘China threat’ has now escalated to opening the door for mass suppression of democratic rights and crushing of opposition from Indigenous nations to environmentally dangerous projects that could harm ordinary people.

If the Ontario Premier’s Bill C-5 is mimicked by other premiers, or the federal government, then the ‘China threat’ to Canada will have succeeded in securing the open dismantling of democratic rights around the country, under the guise of economic security.

CSIS cites S&P Global as having Canada taking “from first discovery to first production [for mining]… an average of 27 years (including 10 to 15 years just to obtain a permit”.

Ford’s desired disregard for provincial laws, regulations and municipal bylaws, in addition to Bill 5’s “shortening the timelines for mining approvals”, would be crucial to speed up the process of starting up critical minerals mining and processing in the province, and making his Fortress Am-Can dream come true.

The above draft document coming out from a G7 summit held in Canada is quite logical with Canada’s imperial self-interest in mind.

Yet, the path towards Western self-sufficiency in rare-earth elements will still take decades to traverse, and raises the question: how could a relationship of mutual respect for sovereignty be built, that doesn’t force Western countries to spend trillions on mining in the hope that domestic resistance doesn’t keep pushing deadlines back indefinitely?

This path is not a long one in principle for the West: stop fuelling Taiwan separatism via public and private diplomatic support, end the constant war games and preparation for war with China, and stop funding Tibet and Xinjiang separatist activities.

For Canada, an end to open support to Uygur separatists (financial – through work for the government – and political), to more plausibly deniable support for Taiwan separatism, Tibet separatism and prioritized platforming of the aforementioned separatists and other anti-China activists, would provide a strong basis for win-win cooperation with China, instead of paranoia and warmongering.

Could Canada’s elite, imperial themselves, but subordinate to the US empire, take such a path? Canada’s intelligence agencies are doing their best to squelch this potential with Canada’s Chinese ‘foreign interference’ paranoia. Would the US do such a thing? Not unless they are forced to.

The working person’s interests fundamentally differ with those of corporate and financial elites. The made-in-Canada G7 plan to cut reliance on Chinese critical minerals bluntly showcases this reality.

Aidan Jonah is the Editor-in-Chief of The Canada Files, an independent news outlet covering Canadian foreign policy with a strong focus on Canada-China relations. Jonah wrote a report for the 48th session of the UN Human Rights Council, held in September 2021.

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