Canada announced on Friday the first round of projects under G7 critical minerals the manufacturing alliance was intended as a counterweight to China's dominance in the sector.
The 25 initiatives include agreements to purchase a graphite mine in Quebec and an investment to expand a rare earth processing plant in Ontario.
Canada's Minister of Energy and Natural Resources said the alliance's early initiatives should be seen as a clear signal that the group is serious about reducing market concentration, ensuring national security and attracting investment.
“As we move rapidly to reduce our dependence on concentrated supply chains, our collective commitment is clear. Every delay is a concession to economic and national security interests. We will not tolerate this any longer,” Minister Tim Hodgson said.
China is a major producer of critical minerals and an even larger processor, with an average market share of 70 percent for 19 of 20 key minerals, according to the International Energy Agency. When it comes to rare earth elements, which are difficult to mine and used to make powerful magnets used in everything from electric vehicles to advanced radar systems, their position is even more dominant: they account for 91 percent of global oil refining output.
The country has used that position in recent months to tighten restrictions on exports of such minerals, increasing pressure on G7 ministers to make progress on talks on how to diversify their supply chains during their two-day meetings in Toronto this week.
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Some temporary relief came just before those talks began Thursday when China agreed, as part of an agreement with the United States, to suspend controls on some rare earth mineral exports for one year.
However, the US energy secretary suggested in Toronto that this continues to underscore the need for the G7 to establish its own capacity to extract and process its own minerals.
“China, frankly, has simply used non-market methods to drive out the rest of the industry, the rest of the world, from producing these products with strategic leverage. Now everyone can see it,” Secretary of State Chris Wright said at a press conference Friday.
The raft of investments announced at G7 meetings included agreements to purchase Nouveau Monde Graphite's Matawini mine near Montreal. The mine purchase deals, an agreement to buy a portion of the mine's future output, were negotiated by the federal government, Panasonic and Traxys, a Luxembourg-based 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 potential funding of up to $500 million from Export Development Canada.
Vianode announced in January that it had signed a multibillion-dollar deal with General Motors to supply its electric vehicles.
Graphite is a key component of lithium-ion batteries used in electric vehicles and broader energy storage systems.
The Ucore Rare Metals facility in Kingston, Ont., also was conditionally approved for up to $36 million in federal money to help scale the 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, which are key to decarbonizing the economy, is expected to rise sharply in the coming years. According to a Canadian Climate Institute report released earlier this year, Canada will need $30 billion in capital investment 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 place itself at the center of the minerals debate. But he also noted that these statements are “more project-oriented than policy-oriented.”
“There's still a lot of policy work to be done,” especially on market standards, said Alschner, who studies Canada's international critical minerals strategy.
© 2025 The Canadian Press
