Commentary: Canada should back critical minerals with buyers

The federal government’s first move through the Canada Critical Minerals Accelerator did not go to a lithium developer or a nickel mine. It went to germanium, antimony and gallium at Teck Resources’ Trail smelter in British Columbia which has been running since the 1890s. The Canada Growth Fund agreed to a commercial framework for an equity-like investment of up to $400 million, alongside a potential $850-million commitment by Teck and Ottawa secured the right to negotiate purchase rights over part of the output. That choice reveals more about how Ottawa is thinking than any policy document has.

Natural Resources Canada is accepting submissions only until Aug. 14 on an update to the Critical Minerals Strategy, the first revision since 2022. That strategy treats its 34 minerals as a single policy category, which worked for an inventory but is a liability for a document now used to direct capital. Anyone with a stake in how Ottawa allocates critical minerals funding should be preparing a submission, and what follows is a starting position.

Defence and semiconductor metals

Germanium, gallium, antimony and tungsten belong at the top. Beijing placed germanium and gallium under export control in 2023 and extended restrictions to antimony the following year, and few have practical substitutes in their key applications. Germanium goes into fibre optics and infrared optics, gallium into radar semiconductors, antimony into munitions and flame retardants, tungsten into armour and cutting tools. Volumes are small and pricing opaque, but the buyer today is increasingly a defence ministry working to a deadline rather than negotiating on price.

Trail anchors this category and is now funded, with the expansion set to double existing germanium and antimony capacity and potentially add gallium output that North America lacks. The strongest candidate behind it is Fireweed Metals’ Macmillan Pass district in the Yukon, where Macpass holds what the company calls the largest known accumulation of germanium and gallium and the adjacent Mactung ranks among the largest high-grade tungsten resources on earth.

Washington and Ottawa have already committed to the district, with Fireweed awarded up to $35.4 million in joint funding including US$15.8 million from the US Department of Defense, and a separate NRCan agreement provides up to $12.9 million to plan road and transmission upgrades along the North Canol corridor. Access rather than geology is the binding constraint, making the corridor a candidate for the First and Last Mile Fund and its $1.5 billion through 2030.

Rare earth processing

In rare earths the chokepoint is not mining but separation and metallization, the chemistry that turns concentrate into metal a magnet maker can use, and Canada holds an impressively advanced integrated rare earth processing position in North America. The Saskatchewan Research Council’s Rare Earth Processing Facility in Saskatoon became the first operation on the continent to produce rare earth metals at commercial scale in 2024, with integrated operation scheduled for 2027. Planned output is magnet-grade neodymium praseodymium metal alongside the heavy elements dysprosium and terbium, enough at capacity to supply magnets for roughly 500,000 electric vehicles annually.

REalloys signed a five-year agreement in December to purchase the majority of that production, driven by US defence supply chain requirements taking effect in January 2027, and has since committed approximately $20.6 million to expanding throughput while funding a heavy rare earth metallization plant. The customer arrived before the capacity was finished, and private capital followed.

Federal priority should replicate that sequence, backing processing capacity with contracted output and the deposits able to supply it. Torngat Metals’ Strange Lake on the Quebec-Labrador border is globally unusual for its share of heavy rare earths, while Defense Metals’ Wicheeda in British Columbia is the stronger light rare earth case. Support for either should require the material to feed a Canadian separation circuit, since concentrate exported is value exported.

Battery and electric-vehicle minerals

Lithium, graphite, nickel and cobalt belong behind the defence-linked metals because their domestic customer base has receded. Honda indefinitely suspended its $15-billion Alliston, Ont. complex in May, and beneath the assembly-plant headlines sat a 36-gigawatt-hour battery factory and the cathode material processing facilities that represented the domestic offtake against which Canadian graphite, nickel and lithium projects had been financed.

Stellantis has likewise exited the NextStar Energy joint venture in Windsor by transferring its interest to LG Energy Solution for a nominal US$100, and the plant has since pivoted toward stationary storage.

These minerals remain worth holding, since demand will recover and deposits do not relocate, but a federal dollar behaves differently depending on where it lands. Behind germanium at an operating smelter with offtake attached, it becomes metal production and a strategic reserve.

As Aug 14 nears

Proponents should frame submissions around four characteristics separating projects worth federal money from those that will merely consume it. The first two are expansion of facilities already operating and purchase agreements signed before construction concludes. The next two are infrastructure that opens a district rather than a single deposit and feedstock chemistry matched to a plant Canada operates or is building, because material that can only be processed in Asia is not a Canadian asset regardless of grade.

Such submissions will serve officials better than requests for funding envelopes, because capital is not the constraint. Ottawa committed more than $3.6 billion at PDAC in March, and the Critical Minerals Production Alliance launched during the 2025 G7 presidency has mobilized $18.5 billion across two rounds. What the sector lacks is a published order for deploying the remainder.

The list of 34 was written to describe what Canada has; the update needs to establish what Canada intends to build. The distance between those two documents is worth several billion dollars in capital otherwise committed in the wrong places.

Noah Chaikin is a strategy consultant in Kearney’s Foresight practice, where he advises senior executives on navigating geopolitical disruption and long-term strategic uncertainty. His work focuses on strategic foresight, including scenario planning, and corporate statecraft, with particular expertise in critical minerals, trade, industrial policy, and economic security. Noah holds a master’s degree in international relations from Harvard University, where his thesis examined how Canada could build sovereign rare earth refining and permanent magnet manufacturing capacity.