- Critical mineral reserves & production — what Canada holds in the ground and how much it actually produces.
- Mineral exploration investment — the capital flowing into the search for new deposits.
- Mine permitting & development times — how long it takes to turn a discovery into a producing mine.
- Energy capital investment — capital spending across the energy and resource sector.
- Investment screening regime — how Canada vets foreign control of strategic assets.
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. Its 2023–25 export controls on graphite, gallium, germanium, and seven rare-earth elements made that 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."
Every material in the processing chart above is also a defence input. NATO's list of 12 defence-critical raw materials, published in December 2024, includes rare earths, gallium, germanium, graphite, cobalt, and lithium. Samarium, one of the seven rare earths China put under export licence in April 2025, goes into samarium-cobalt magnets, which the U.S. Congressional Research Service describes as "ideal for military technologies such as precision-guided missiles, smart bombs, and aircraft." Ottawa's Defence Industrial Strategy (February 2026) notes that Canada produces 10 of NATO's 12. Producing them is the half Canada already does. For the battery and magnet materials, the step that turns Canadian ore into something a defence supplier can buy mostly happens abroad, as the table of Canadian flows shows.
The leverage has already been used. In September 2010, after Japan detained the captain of a Chinese trawler that collided with Japanese coast guard vessels near the Senkaku Islands, Chinese rare-earth shipments to Japan were halted. Japan then relied on China for nearly 90% of its rare-earth imports. In December 2024 Beijing banned exports of gallium, germanium, and antimony to the United States and prohibited dual-use exports "to U.S. military users or for military uses." The April 2025 rare-earth licensing reached civilian industry within weeks: in June, Reuters reported that Suzuki had halted production of its Swift. That October, China extended licensing to foreign-made parts containing Chinese rare earths or made with Chinese technology, and added cathode precursors and a wider range of anode materials.
Beijing suspended the October expansion for a year in November 2025. The pause expires on 10 November 2026, and the April 2025 licences on seven heavy rare earths and their magnets were left in place.
The case against building refineries here is the IEA's own arithmetic. Projects outside the incumbent countries typically cost about 50% more to build, and lithium prices have fallen more than 80% since 2023. On those numbers, buying refined material from the cheapest seller looks rational. The difficulty is what low prices do to everyone else. BHP suspended its Western Australian nickel operations in October 2024, blaming "a global oversupply of nickel" driven by Indonesian supply, much of it Chinese-financed (see methodology note 3). A country that cannot refine is a price-taker twice: on the concentrate it sells and on the finished material it buys back.
Allies now pay for refining out of defence budgets. The American support for MP Materials noted above is a Department of Defense deal, signed in July 2025: a US$400 million equity stake, a floor price of US$110 per kilogram for its NdPr for 10 years, and a guarantee that every magnet from its new plant will be bought for a decade after commissioning. Pentagon money has reached Canadian refiners too. It awarded Electra Battery Materials US$20 million in August 2024 for its cobalt sulphate refinery at Temiskaming Shores, Ontario, 21 months before Ottawa committed $20 million of its own. Ucore Rare Metals, headquartered in Halifax with a demonstration plant in Kingston, is building its first commercial rare-earth separation plant in Louisiana, backed by US$22.4 million from the Pentagon and CA$4.28 million from Ottawa.
Ottawa has since written the same logic into policy. Budget 2025 announced a $2 billion Critical Minerals Sovereign Fund that can take equity, guarantee loans, and sign offtake agreements. In October 2025 the government said it would use the Defence Production Act to stockpile critical minerals, and the Defence Industrial Strategy committed it to publish, by the second quarter of 2026, a plan to expand production, processing, stockpiling, and procurement of defence-critical minerals. This metric counts refined output, so it moves only when that money produces some. Electra's refinery, the nearest candidate, is scheduled to finish construction by June 2027.
Across battery and magnet materials China refines 60–94% of global supply on IEA estimates, 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-hydroxide refining, cobalt refining for batteries, or battery-grade graphite anode processing, and imports nickel sulphate and anode material. 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.
China has halted or restricted refined-mineral exports against Japan (2010) and the United States (2024), and in 2025 reached into foreign-made products containing Chinese rare earths. That expansion is paused only until 10 November 2026. Allies now fund non-Chinese refining from defence budgets, and the Pentagon is co-funding two Canadian-led refineries, one of them in Louisiana.
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. 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. The metric sits under Securing because that dependence has already been used as leverage, and Canada's allies now treat refining capacity as defence spending.
Canada mines battery and magnet minerals but refines almost none of them. Its only rare-earth plant, at about 400 t/yr, is ≈0.1% of China's refined output.
- Compared with
- China's share of global refining and processing by material, with allied build-outs in the United States, Australia, and the EU described in prose.
- Where Canada sits
- Canada runs no commercial lithium-hydroxide refinery, no battery-grade graphite anode plant, and no commercial cobalt refining for batteries. Its one rare-earth facility, SRC in Saskatoon, reached about 400 t/yr in 2025, while China makes 94% of the world's rare-earth magnets.
- Which way it is moving
- Up. Canada's rare-earth processing rose from nothing before 2024 to about 400 t/yr in 2025, an improvement from a near-zero base. China's share of magnet production has risen from ~50% in 2005 to 94%, and the IEA expects the top three refiners to still hold ~82% of supply by 2035.
- What the verdict follows
- Canada's refining position against the country that dominates the market, the only comparator the page quantifies. China holds 94% of rare-earth magnet production, while Canada's rare-earth processing is about 400 t a year, built from near zero. Growth from that base does not change the position, so Weak.
- Data basis
- IEA, Global Critical Minerals Outlook 2025 (2024 shares), Benchmark Mineral Intelligence (graphite anode), Government of Saskatchewan / Saskatchewan Research Council (Sept 2024), and Natural Resources Canada, Copper facts. Page last reviewed September 2026 · Data current to 2024, the latest IEA Global Critical Minerals Outlook.
Primary sources
- IEA, Global Critical Minerals Outlook 2025 — China's share of refined/processed output by material, refining-concentration trends, and the 2035 diversification outlook.
- IEA, "China's share in rare earth magnet production, 2024" — the 94% magnet figure.
- Benchmark Mineral Intelligence — spherical/coated graphite anode concentration (>99% in China).
- Government of Saskatchewan / Saskatchewan Research Council (Sept 2024) — SRC rare-earth processing facility capacity and timeline.
- Natural Resources Canada, Copper facts — 2024 mine production in concentrate, concentrate export volumes, and destinations (China, Japan, South Korea).
- Glencore Sudbury INO and Glencore Nikkelverk — Sudbury nickel–cobalt matte shipped to Kristiansand, Norway for refining (main feed source since 1929).
- CBC News (June 2024) and The Globe and Mail — Vital Metals' Nechalacho stockpile: 2023 agreement to sell to Shenghe Resources (9.9% cornerstone investor), diverted to SRC for $3.3M with NRCan facilitation.
- Mining Technology — North American Lithium — Canada's only producing lithium mine; spodumene offtakes (Piedmont, LG Chem, Tesla); no domestic conversion.
- NATO, Defence-Critical Supply Chain Security Roadmap — the 12 defence-critical raw materials (list released 11 December 2024).
- Congressional Research Service, R41744 (December 2013) — samarium-cobalt magnets in precision-guided missiles, smart bombs, and aircraft.
- Government of Canada, Defence Industrial Strategy (February 2026) — Canada produces 10 of NATO's 12; commitment to a defence-critical minerals plan by Q2 2026.
- CSIS Asia Maritime Transparency Initiative — the 2010 Senkaku trawler collision and halt of rare-earth shipments to Japan.
- World Economic Forum (October 2023) — Japan's ~90% reliance on Chinese rare-earth imports in 2010.
- CSET translation of MOFCOM Notice 2024 No. 46 — the December 2024 gallium, germanium, and antimony ban on the United States.
- IEA commentary (23 October 2025) — the April and October 2025 rare-earth and battery-material controls.
- Reuters, via Deccan Herald (June 2025) — Suzuki halts Swift production over rare-earth curbs.
- Yahoo Finance (April 2026) — suspension of the October 2025 controls to 10 November 2026; April 2025 licences retained.
- Australian Mining Review (July 2024) — BHP's Western Australia nickel suspension and its stated reason.
- MP Materials (10 July 2025) — Department of Defense equity, NdPr price floor, and magnet offtake terms.
- Electra Battery Materials (August 2024) and The Logic (May 2026): U.S. and federal funding for the Temiskaming Shores cobalt refinery; construction to finish by 30 June 2027.
- Ucore Rare Metals (June 2025) — Department of Defense and federal funding for the Louisiana separation plant.
- Mining Weekly (November 2025) — Budget 2025 Critical Minerals Sovereign Fund and its instruments.
- Natural Resources Canada (31 October 2025) — Defence Production Act stockpiling intention.
Methodology notes
- Scope. "Midstream" means refining, separation, and conversion into battery-grade chemicals, anode/cathode material, and permanent magnets, the steps between the mine gate and the finished cell or motor. Materials covered: lithium, nickel sulphate, cobalt, graphite anode, and rare-earth separation/magnets.
- Processing vs mining. Shares are of processed/refined output, deliberately distinct from mining shares; the gap between them is the point. Figures are IEA 2024 estimates except spherical-anode concentration (Benchmark) and the SRC capacity (Government of Saskatchewan).
- Nickel. Refined nickel and battery-grade nickel sulphate are concentrated in China and Indonesia (Indonesian capacity largely Chinese-financed). The IEA does not publish a clean China-only share for nickel sulphate, so nickel is discussed in the narrative rather than charted to avoid a non-comparable bar.
- Comparability. The SRC ramp (chart 2) and China's refined output are different scales by design; the ≈0.1% comparison uses China's order-of-magnitude refined rare-earth output (300,000+ t/yr) against SRC's ~400 t/yr capacity.
- Canadian flows ("Where Canada's own ore goes"). The destination table mixes bases by necessity: copper uses NRCan trade statistics; nickel/cobalt, lithium, and graphite use company disclosures and offtake announcements rather than a comprehensive trade series; rare earths describe a single transaction. It is illustrative of direction of flow, not a measured share of each commodity's output. The globe above the table encodes exactly this and no more: every arc is drawn at the same weight, so it shows where material goes and never implies how much. Volume-weighted arcs were considered and rejected. Only copper has a comparable trade series behind it.
- Security context. "Why refining sits under Securing" is narrative context drawn from government, company, and press sources. It adds no charted series and does not change the basis of the verdict. The widely quoted figure of 920 pounds of rare earths per F-35 is deliberately not used: it traces to an unpublished 2012 Department of Defense study whose method has never been disclosed.
- Companion workbook. The editable processing-share and SRC-capacity tables live in Securing_Midstream-Processing_Data.xlsx.
