Critical Mineral Processing: Reducing Reliance on China

Rare Earth Oxides (REOs), Gallium, Cobalt, and Germanium are vital "Critical Minerals" due to their indispensable role in high-tech industries, green energy, and national security. All four minerals are unequivocally considered "critical" by major economies due to their vital roles and supply vulnerabilities.

Canada possesses significant capabilities in processing these minerals and is actively expanding them as part of its Critical Minerals Strategy, aiming to reduce global supply chain vulnerabilities, particularly dependence on China.

1.Rare Earth Oxides (REOs)

Canada boasts some of the world's largest Rare Earth reserves. The Saskatchewan Research Council (SRC) is constructing North America's first fully integrated, commercial Rare Earth processing facility, which has successfully produced magnet metals. Plus, as of January 2025, Canada Rare Earth Corp. entered into a Memorandum of Understanding (MOU) with a private Laos-based company, granting it the right to acquire a 70% stake in a permitted Rare Earth refinery in Laos, an already built facility poised to become operational in 2025 and with the Lao government's renewed support for in-country processing.

2.Gallium

Canada has initiated primary Gallium extraction through Rio Tinto's Vaudreuil alumina refinery in Quebec. This pilot project, with plans for a demonstration and commercial plant, aims to produce 40 tonnes annually, making Canada a significant global player.

3.Germanium

Canada produces Germanium as a by-product of zinc smelting, with Teck Resources in British Columbia being a major integrated producer.

4.Cobalt

Canada produced over 5,000 tonnes of cobalt in concentrate in 2023, primarily as a by-product of nickel mining, and refined nearly 5,000 tonnes domestically. Electra Battery Materials is redeveloping its Ontario facility to process 6,500 metric tonnes of cobalt sulfate annually, representing about 5% of global market share.

Overall Strategy for Increased Processing Capabilities

Canada's comprehensive Critical Minerals Strategy aims for significant increases in processing across all these minerals.  This will necessitate:

-Substantial Public and Private Investment: The federal government committed nearly $4 billion in Budget 2022 to support the implementation of this strategy and this has to be leveraged.

-Accelerated Project Development: Streamlining regulatory and permitting processes to bring new projects online faster.

-Innovation and Technology Development: Investing in R&D for more efficient, cost-effective, and environmentally friendly processing.

-Skilled Workforce Development: Training and attracting the necessary talent.

-Infrastructure Development: Supporting mining and processing with adequate transportation and energy.

-International Partnerships: Collaborating with allies to secure supply chains and share expertise.

-Indigenous Participation: Ensuring meaningful engagement and partnership.

Canada’s Critical Minerals Strategy, backed by nearly $4 billion since 2022, has already begun rolling out key funding and tax incentives, with infrastructure and innovation programs underway.

Prime Minister Mark Carney’s new administration has made accelerated economic growth and resource development a central priority. Key elements of his plan include:

-Establishing a “Fast-Track Office” for major projects, imposing a strict two-year timeline for approvals, down from the current average of 5.5 years.

-Harmonizing federal and provincial environmental assessments into a single, streamlined process to reduce duplication and accelerate decisions.

-Expanding critical mineral tax credits and leveraging new investment funds to attract private capital and de-risk projects.

-Launching the “First and Last Mile Fund” to connect critical mineral projects to supply chains and infrastructure.

The global reliance on China for critical raw materials, including its control over 70% of Rare-Earth mining and 85-90% of refining capacity, underscores the urgency of Canada's efforts to establish secure and diversified supply chains for these essential elements.

SP

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Mining News: www.minestockers.com (Disclosure: the writer is a shareholder in minestockers.com)


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