In early February, Foreign Affairs Minister Anita Anand represented Canada at an inaugural critical minerals ministerial organized by U.S. Secretary of State Marco Rubio in Washington, D.C. The goal of the meeting, which included nearly 50 other nations, was to work toward a shared position on so-called critical minerals (see box), their extraction, upgrading, and exchange in global markets.
For the U.S. and many attending governments, the impetus for the ministerial was China’s dominant position across all aspects of the critical mineral market. Outcomes included the U.S. signing numerous bilateral critical minerals frameworks and memoranda of understanding (MOUs) with attending countries. Minister Anand held back, stating that whether or not to cooperate with the U.S. on critical minerals will be tied to the review of the Canada-U.S.-Mexico Agreement (CUSMA).
The Trump administration also announced two new pillars of its critical minerals strategy: Project Vault and the Forum on Resource Geostrategic Engagement (FORGE).
What is a critical mineral? Defining critical minerals can be difficult, depending on where you are, a particular material could be considered an official critical mineral while elsewhere it is not. In Canada, Natural Resources Canada identifies 34 minerals and metals as critical, while the U.S. Geological Survey lists 60.
While jurisdictions have their own definitions, critical minerals are generally defined as those essential to a country’s perceived economic or national security. Critical minerals have also been defined by their close link to products for the green energy transition, a point emphasized by the mining industry’s keenness for good public relations.
Project Vault is a strategic critical mineral reserve backed by $12 billion in funding from both public and private sources. The Export-Import Bank of the United States (EXIM) will finance the purchase of raw materials for storage at critical minerals at facilities across the country, with the aim of strengthening industrial resilience for U.S.-based manufacturers in defence, automotives, AI, and tech. FORGE is made up of 17 allied nations that have agreed to a mandate for collaboration at the policy and project levels to secure critical mineral supply chains.
Within these initiatives, the U.S. government is considering setting a price floor for certain critical minerals. A price floor mechanism will counter the low prices of Chinese competitors, resulting from lower labour costs, less stringent environmental regulation, and subsidies from the Chinese state. A multilateral pricing mechanism will also open like-minded countries to increased U.S. investment in their critical minerals sectors.
The USTR’s 2026 Trade Policy Agenda highlights critical minerals as a key priority. A critical minerals preferential free trade zone with allied partners will include a range of mechanisms to create a new supply for critical minerals for Project Vault that will have to be extracted outside of the U.S.
A copy of the U.S. critical minerals framework for agreements with allied nations highlights cooperation in securing a supply of strategic reserves, facilitating public and private investment into mining and processing, price mechanisms (as discussed above), alongside other regulatory tools.
Why China dominates the market
This U.S. strategy to transform the critical minerals market is an appendage of the U.S.-China power struggle. The future (and current) profitability of critical minerals makes control of the market an important marker of future global dominance. Currently, China is comfortably leading this race.
The Chinese market advantage is clear: while critical minerals are found all over the world, their processing is heavily concentrated within Chinese companies. This is no fluke. China’s 2015 “Made In China 2025” plan outlined critical mineral system dominance as a key goal, and was followed by strategic investments across all levels of the critical mineral supply chain.
As it stands, China is the dominant refiner of most key minerals. In an IEA assessment of 20 critical minerals, China was the leading refiner for 19, with an average market share of around 70 per cent.
Consolidating not just raw product extraction but also the value-added production of critical mineral refinery and tech products has made China a major player at each stage of the mineral value chain. China’s export control regime has been key to China’s mineral policy, limiting global access to important minerals for manufacturing.
It is this significant bottleneck in the supply of critical minerals and subsidiary products, such as magnets, that the new Trump administration’s strategy aims to mitigate. Limited access to Chinese technologies for processing and refining critical minerals makes it difficult for the U.S. or any other government to establish productive capacity.
Subsequent attempts by the U.S. and Europe to disrupt China’s market advantage have had very limited, if any, impact on China’s market position. Since 2020, growth in refined material production has continued to concentrate among market leaders. Cobalt, for example, saw supply growth driven nearly solely by China.
Ultimately, early responses from Western countries could not compete with the production costs, market prices, access to technologies, and the presence of cheap Chinese products in their markets. Under these market conditions, it is no surprise that the Trump administration and previous U.S. governments have sought to radically change the outlook for critical minerals for U.S.-based firms reliant on the materials.
Early warning signs of U.S. “collaboration”
Early signs of U.S. investment following the announcement of Project Vault have raised major concerns for human rights groups. While plenty of countries have a mutual interest in challenging Chinese dominance of the mineral supply chain, wariness about joining the U.S. venture into critical minerals is well warranted.
The Trump approach to the critical minerals-driven crisis in the Democratic Republic of the Congo (DRC) is extremely problematic. The U.S.-DRC Strategic Partnership Agreement (SPA) commits the U.S. to promoting peace and responsible mining in the mineral-rich nation, but first and foremost, it proposes a shift in control of Congolese minerals from China to the U.S. The SPA’s stabilization requirement focuses on supporting productive areas to secure mining operations, rather than minimizing civilian victimization.
The SPA is clear: the Congolese government must establish a strategic critical mineral asset reserve, including exploration projects, to be reserved for U.S. companies. This is to be overseen by a joint steering committee, with half of its members appointed by and from the U.S. government. As if the U.S. isn’t already keen on investing, the DRC must also establish regulatory incentives for U.S. persons doing business in the nation as part of a “tax stabilization” period.
While benefits for the U.S. are clear, the same cannot be said for the Congolese people. The SPA would see the suspension of artisanal processing centres without any consultation with or compensation for local communities that rely on the practice for their livelihoods. Groups in the U.S. and the DRC have condemned the SPA for locking the DRC further into foreign control, thereby ceding its right to a sovereign future.
The DRC’s unique political conditions make the SPA particularly worrisome. But even in more stable regulatory conditions and traditional trading partners, such as Mexico, alignment with Trump’s critical mineral strategies has communities worried.
The U.S.-Mexico Critical Minerals Action Plan, one of the many deals announced in early February, gives both countries 60 days to contemplate how to coordinate on critical minerals. Many Mexicans have made their worries clear: Mexican mining policy could increasingly be shaped by the U.S. critical minerals strategy, rather than by the social forces that brought President Claudia Sheinbaum to power.
The Mexican government has sent mixed signals in this regard. Minister of Economy Marcelo Ebrard has made glowing remarks about the mining industry, announcing plans to accelerate mining concessions and facilitate additional investment. Meanwhile, following the announcement of the action plan, President Sheinbaum made clear that the Mexican state would not revert to an extractive focus or hand over national natural resources, stressing that any agreement must respect Mexican sovereignty.
Indigenous and environmental groups point out the absence of language on the collective rights of communities or on the protection of the environment in the agreement, leading many to consider the action plan a betrayal of the campaign promises made to communities affected by mining projects.
A critical moment for Canada
Like the U.S., China, and just about every other player in the mineral supply chain, Canada has put critical minerals at the forefront of federal and provincial policy. The Canadian Critical Minerals Strategy (CCMS) has provided $3.8 billion in funding to increase the supply of critical minerals and established a new Critical Minerals Sovereign Fund (CMSF) to make federal investments in the critical mineral value chain.
Earlier this month, Minister Hodgson announced the second round of 30 partnerships and investments under the Critical Minerals Production Alliance, which was launched by the Carney government during the 2025 G7 meetings. Altogether, the Alliance announced $18.5 billion in Canadian critical mineral projects.
Critical mineral projects have been fast-tracked by the Canadian government due to their strategic importance. While these minerals are valuable as industrial inputs, the impacts of extracting and refining them on the local environment, communities, and Indigenous nations need to be considered more deeply moving forward. Mining projects need to be more carefully assessed and regulated, not deregulated and fast-tracked.
Critical minerals development should not undermine the government’s obligations and the self-determination rights of Indigenous Peoples. Deeper deregulation of the mining industry will not position Canada well amid an immense period of precarity in the global market and the transition away from fossil fuels.
Critical minerals have also made their way into Prime Minister Mark Carney’s trade agenda, including MOUs, alliances, and partnerships with a range of countries he has recently visited.
As Muneeb Javaid put it, the centrepiece of the Canada-UAE trade and investment treaty discussions is a $70 billion investment pledge by the Gulf nation into national building projects, including liquified natural gas and critical minerals. The signing of the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA) marked a further distressing approach to critical minerals.
In particular, the inclusion of an investor-state dispute settlement (ISDS) system in that agreement poses a threat to human rights in favour of mining interests. The Canadian summary of consultations on the CEPA noted that Canadian mining firms suggested that protection of investment through ISDS would be a beneficial tool for the sector.
The trajectory of Canada’s impact on the critical minerals supply chain in Indonesia is now clear: Canadian mining companies will reap massive benefits while local communities and government will be limited in their ability to resist, as a result of investment tools such as ISDS. It is equally worrying that Emirati, Indonesian and other foreign investors in Canadian fossil fuel and mining projects will gain the same rights to sue Canada for any regulatory hurdles—including environmental regulations—that impede their profitability.
As the critical minerals strategies of Canada and the U.S. take shape, the upcoming CUSMA review will be central to understanding how both governments view partnership in the sector.
Hodgson, in a recent presentation, stated his belief that critical minerals were central to Canada’s sovereignty and the security of allies. Additionally, he stated that, “In trade negotiations … our critical minerals are cards in our hands.” For the CUSMA review, this could mean that critical minerals are a key lever for Canada and a potential element of any deal reached with Trump, as discussed in the CCPA’s Countdown to the CUSMA review.
It could also mean that control over Canadian critical minerals, from mining and processing to end uses, whether in energy technologies or weapons, is just tossed away to sweeten the pot for negotiations that turn out to be fruitless. There’s already a precedent: Mark Carney has done just that with the digital services tax.
Great care is needed in engaging with Trump’s critical mineral strategy. U.S. and other foreign investment should not come at the expense of Canadian autonomy or control over the mineral value chain.
Given the inefficiency and lack of circularity in Canada’s economy, some “critical minerals” need to be mined, but it needs to be done under more—not less—robust environmental regulation. And it must be done in coordination with a strategy to respond to the climate crisis, addressing energy and materials demands and phasing out fossil fuels.
We cannot afford to waste valuable resources building weapons, or A.I data centres for billionaires. Critical mineral strategies that were initially sold to the public as “green” are going down a cynical road, and need to take a sharp turn towards sustainability and peace.
