The Canadian government is intensifying efforts to establish a strategic mineral reserve plan aimed at ensuring national supply chain security and supporting G7 allies to counter China’s dominance in critical mineral markets.
Last week, Canada’s Minister of Energy, Tim Hodgson, along with G7 partners, announced multiple measures to strengthen critical mineral supply chains and reduce reliance on China. Hodgson stated that Ottawa would safeguard national security and sovereignty through strategic reserves, although the specific minerals have not all been publicly disclosed.
According to The Globe and Mail, Greg Frame, senior communications advisor to Hodgson, confirmed that Scandium and Graphite have been identified as the initial minerals included in the government’s reserve plan.
Scandium, the lightest of rare earth elements, is used for strengthening aluminum alloys and fuel cell materials due to its high melting point and corrosion resistance. Graphite, a carbon allotrope, possesses excellent conductivity, thermal properties, and lubrication abilities, making it a key material in electric vehicle batteries, renewable energy equipment, and defense industries. Both have become strategic minerals in the global energy and high-tech industries.
The Canadian federal government signed a mineral procurement agreement with Nouveau Monde Graphite (NMG) in Quebec on October 31, allowing the government to purchase and stockpile graphite produced by the company as needed.
Eric Desaulniers, CEO of NMG, stated that the company aims to be a strategic partner for Western governments and industries to promote energy independence, strengthen national security, and facilitate sustainable development in manufacturing.
Julie Paquet, spokesperson for the company, mentioned in an interview with The Epoch Times that the agreement allows the government to flexibly determine whether minerals enter strategic reserves or the market based on national priorities and policy guidance.
As for Scandium supply, Canada will partially procure from the mining giant Rio Tinto, located in Sorel-Tracy, Quebec, the only Scandium production base in North America. This metal plays a critical role in aviation, automotive, and defense sectors.
On November 1, Rio Tinto announced that the Canadian government would invest approximately $25 million through the Canada Growth Fund to enhance Scandium production capacity at the Quebec plant, strengthening the national critical mineral supply chain. Rio Tinto further disclosed signing two commercial agreements with the government covering procurement and cooperative marketing and storage of Scandium.
Hodgson emphasized Canada’s efforts to become a leader in safeguarding critical mineral supply among G7 countries and assisting nations in reducing reliance on China. Currently, China dominates over 90% of global rare earth refining capacity and around 70% of worldwide production in Scandium and Graphite markets.
As per the 2025 budget released this week, the Canadian government plans to allocate $2 billion over five years to the “Critical Minerals Sovereignty Fund,” supporting strategic projects and enterprises through equity investments, loan guarantees, and procurement agreements.
Ottawa stresses that by stockpiling critical minerals and enhancing domestic production capabilities crucial for defense, it can ensure the security of Canada and allied countries’ defense industries’ supply chains, while also helping to maintain Arctic sovereignty and further NATO’s deterrence and defense strategy goals.