Mining ore is only the first step. Turning it into battery-grade chemicals, separated rare earths, and finished magnets is where the real control sits — and that midstream is overwhelmingly Chinese. China refines 60 to 94% of the world's battery and magnet materials, far more than it mines. Canada holds the rock (see reserves & production) but almost none of the refinery. For a country betting on critical minerals, that is a security gap, not just an industrial one.
The reserves metric showed that Canada sits on a broad critical-minerals endowment and the permitting metric showed how slowly it turns discoveries into mines. This metric is about the step after the mine gate — refining, separation, and the conversion of mineral concentrate into the battery cathodes, anodes, and permanent magnets that an electrified economy and a modern military actually consume. It is the part of the value chain that creates the most economic value and carries the most leverage, and it is the part China has spent two decades cornering. When Beijing wants to apply pressure, it does not restrict ore; it restricts processing technology and refined output — as its 2023–25 export controls on graphite, gallium, germanium, and seven rare-earth elements made plain.
The chart below shows China's share of global processing — not mining — for the materials at the heart of the energy transition. The pattern is consistent and steep: China's grip on the chemistry is far tighter than its grip on the rock. It mines roughly 60% of the world's rare earths but separates about 90% of them and makes 94% of the magnets; it mines little of the world's lithium but refines well over half of it.
The global shares above are abstract until you follow Canada's own output out of the country. For most of the critical minerals Canada actually mines, the concentrate leaves the mine gate and the value-adding chemistry happens somewhere else — much of it in Asia, some of it inside China specifically. The exceptions, where Canada refines at home, are the legacy commodities.
| Mineral | Canada's output | Where it is processed |
|---|---|---|
| Copper | ~515,000 t in concentrate (2024), nearly half from BC | Roughly two-thirds of concentrate is exported for smelting, mainly to China, Japan, and South Korea (348,211 t exported in 2024, ~$4.0B). Domestic capacity is limited to Glencore's Horne smelter (Rouyn-Noranda) and CCR refinery (Montréal). |
| Nickel & cobalt | Sudbury basin; Voisey's Bay, NL | Split. Vale refines Voisey's Bay concentrate domestically at Long Harbour, NL. Glencore's Sudbury smelter produces nickel–cobalt matte that has shipped to its Nikkelverk refinery in Norway — an allied destination, but offshore value-add — since 1929. |
| Lithium | Spodumene concentrate from North American Lithium (Val-d'Or, QC) — Canada's only producing lithium mine | Entirely exported for chemical conversion; no lithium conversion plant operates in Canada. Offtake buyers include Piedmont Lithium (resold internationally), LG Chem (Korea), and Tesla. |
| Graphite | ~15,000 t/yr concentrate from Lac des Îles, QC — North America's only operating graphite mine | Spheronization and coating into anode material is >99% a Chinese process; graphite mined anywhere is typically shipped to China to become anode. Proposed Quebec anode plants (Bécancour, Baie-Comeau) are not yet in commercial production. |
| Rare earths | No producing mine (Nechalacho, NWT, paused) | The pull toward China is strong even without production: in 2023 Nechalacho's owner agreed to sell its stockpiled ore to China's Shenghe Resources (also a 9.9% cornerstone investor); in June 2024 Ottawa brokered its diversion to the SRC facility in Saskatoon for $3.3M. |
| Uranium | ~24% of world production (Saskatchewan) | The counter-example: Cameco refines at Blind River, ON — the world's largest uranium refinery — and converts at Port Hope, ON. A fully domestic midstream, built over decades. |
The pattern mirrors the reserves picture: where the commodity is a 20th-century strength — uranium, potash, half of nickel — the midstream is at home. Where it is a battery or magnet material, Canadian rock earns mining margins here and processing margins abroad, and the finished material is bought back at import prices.
Canada operates no commercial lithium-hydroxide refinery, no battery-grade graphite anode plant, and no commercial cobalt refining for batteries; battery-grade nickel sulphate and anode material are imported. The one genuine break came in 2024, when the Saskatchewan Research Council's rare-earth facility in Saskatoon began producing neodymium-praseodymium metal — the first and only commercial rare-earth processing in North America — scaling toward roughly 400 tonnes a year. It is a real start and a real capability. It is also, against China's output, a rounding error.
Canada is not alone in trying to catch up. The United States is funding MP Materials' Mountain Pass refining and magnet plants; Australia's Lynas runs the largest non-Chinese separation capacity (in Malaysia and Western Australia); and the EU's Critical Raw Materials Act has fast-tracked 47 strategic projects. But the IEA's project-by-project analysis concludes that even by 2035 the top three refiners will still hold ~82% of supply — essentially back to 2020 levels. Diversification, in its words, "will not materialise through market forces alone."
Across battery and magnet materials China refines 60–94% of global supply, and its processing share consistently exceeds its mining share — ~60% of rare-earth mining but ~90% of separation and 94% of magnets. The leverage lives in the chemistry, which is far harder to relocate than a mine.
Over 99% of spherical/coated graphite anode — the material in essentially every lithium-ion battery — is processed in China. Even graphite mined elsewhere is typically shipped to China to be turned into anode, which is why China's December-2023 graphite export licensing rattled the whole battery industry.
Despite a broad mineral endowment, Canada runs no commercial lithium, cobalt, or battery-grade graphite processing and imports nickel sulphate and anode material. Mining strength does not equal supply-chain security — the value, and the vulnerability, sit downstream of the mine gate.
Canada's first rare-earth processing plant (SRC, 2024) is North America's only one and a genuine capability, but at ~400 t/yr it is ≈0.1% of China's refined output. Allied efforts (US, Australia, EU) are real yet, on the IEA's own numbers, leave the top-three refiners holding ~82% of supply through 2035.
The verdict is weak, and the gap is structural rather than geological. Canada's mineral wealth is real, but wealth in the ground is only strategic leverage once it can be refined into the materials that batteries, grids, and weapons require — and that capacity is almost entirely absent here and almost entirely concentrated in a single strategic rival. Closing it is a decade-scale industrial project requiring sustained public co-investment, offtake certainty, and allied coordination, not a market that will correct on its own.