Canada Races to Mine Rare Earths for Chips, Faces 15-Year Delay Due to Regulations

The Canadian government recently unveiled its Canadian Critical Mineral Strategy Annual Report 2024, which details the country’s achievements and future initiatives to enhance its mining sector for the production of critical minerals, including rare earth elements. According to EE Times, Canada’s Critical Minerals Centre of Excellence at Natural Resources Canada is actively engaged in “identifying and backing strategic projects within the semiconductor supply chain.”

The report categorizes a critical mineral as one with a vulnerable supply chain that has a feasible prospect of being mined domestically. Additionally, it must fulfill one or more of the following conditions: it is vital for Canada’s economic and national security, it supports Canada’s goals to achieve net-zero emissions, and it positions Canada as a sustainable and strategic player in the global supply chain. Presently, Canada has identified 34 critical minerals, with a focus on six key ones: lithium, graphite, nickel, cobalt, copper, and rare earth elements.

Rare earth minerals are essential for manufacturing the latest microchips, but they are not as plentiful as other minerals like silicon or iron. The rising tensions between China and other Western nations have led China to impose stricter export controls on these vital elements, which in turn has driven up their prices. This situation has prompted nations like Australia to seek alternative sources to mitigate the supply issues and maintain semiconductor production. Furthermore, lithium, nickel, and copper are critical for producing electric vehicles (EVs) and the necessary battery technology.

However, one industry leader believes that Canada’s efforts may be too delayed. Establishing a new mine in Canada can take between 10 to 15 years due to stringent regulations. Gordon Harling, CEO of CMC Microsystems, expressed in a personal capacity that the U.S., China, and Australia are already ahead in production and are “less inclined to let environmental concerns slow them down.” He also mentioned, “Another concern is that new battery technology could emerge any time, potentially eliminating the need for lithium.”

Despite these challenges, the global demand for these minerals continues to grow, largely because they are fundamental to developing next-generation technologies. Just as civilizations in the past depended on bronze and iron to progress, today we depend on these critical minerals to advance our society. The risks to the supply chain posed by global geopolitics underscore the need for diversified sources to prevent shortages like those seen during the peak of the 2020 Global Pandemic.