Prime Minister Justin Trudeau just showed a NATO leader the Far North and emphasized the need to protect it from Russian invasion.
That was fine but did nothing to stop creeping Chinese capitalism from undermining Canadian control over its own destiny.
Canada, unfortunately, doesn’t have a clear policy on the critical minerals needed to continue development of clean energy in solar and wind power or the electric vehicle industry.
A true policy would protect critical minerals such as lithium, cobalt, graphite and rare earths from control by other countries.
For decades, long-term planners in China have been snapping up operations in these and other minerals critical to the climate change revolution.
With these policies, China has become a dominant player in critical minerals producing 60 per cent of global rare earths, 84 per cent of manganese, 83 per cent of tungsten, 70 per cent of lithium.
As a producer, China also leads in refining and has used its position to withhold mineral exports from other countries. Some years ago exports to Japan were withheld in a dispute.
Chinese companies, often state-owned, own major stakes and sometimes all of companies in Canada that are producing these minerals.
These minerals, which have numerous deposits in the Prairie provinces, are often in remote locations with little infrastructure, not encouraging to Canadian capital investors.
The rare earth deposit at Hoidas Lake, found by Moose Jaw’s Todd Montgomery is an example. Everything has to be flown into this billion dollar deposit so no development has happened.
If ownership is not possible, the Chinese do off-take agreements which allow them to buy all the production and allow the mineral producer to negotiate financing.
Another obstacle to Canadian or American investment in critical minerals is a past Chinese policy on pricing.
Control of an overwhelming share of the market for these minerals allows the Chinese to play with prices.
By moving prices up and down with unexpected export restrictions, China creates unstable price planning for new mines making it riskier because there is no certainty of price down the road.
China is willing to put up the money. Three years ago, China bought a new lithium producer in Manitoba, known for its high grade of mineral content. Plans are to expand production.
Canada has no policy despite publicly acknowledging the importance of critical minerals.
Too much of the critical mineral industry has already slipped into the hands of Chinese companies. Canada needs a policy to stop the creeping ownership of these crucial minerals and to develop new deposits — and soon.
Ron Walter can be reached at [email protected].
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
