By Jeffrey A. Newman Esq.
Canada is among the world’s top suppliers of rare earth elements, with 15.2 million tons of rare earth oxide reserves. It is behind only China, Vietnam, Brazil, and Russia. These minerals, badly needed by the United States now, having been cut off by China, represent a significant opportunity for the U.S. and Canada not only for accessing and processing the reserves but also for Canada to gain monetarily and to use the North American supply chain and gain security from the joint venture. For the U.S. this would be an opportunity to rebuild our stockpile of the minerals essential for high-tech devices like smartphones, computers, and flat-screen TVs, as well as for clean energy technologies such as electric vehicles and wind turbines. They also play a vital role in medical equipment, military applications, and various industrial processes. They are also essential for:
1. Electronics: Rare earth minerals are vital for components in smartphones, computers, hard drives, and other digital devices. They enable features like high-resolution displays, powerful magnets, and efficient lighting.
2. Clean Energy Technologies:
Rare earth elements are essential for manufacturing powerful magnets used in electric vehicle motors.
Similar to EVs, wind turbines also rely on rare earth magnets for efficient energy generation.
Rare earth minerals are used in the phosphors that create the light in LED bulbs, making them more efficient and longer-lasting.
3. Military Applications: Rare earth elements are critical for various military technologies, including:
- Precision-Guided Missiles: They enable the precision guidance systems in missiles.
- Radar Systems: They are used in radar technology for detection and tracking.
- Night Vision Goggles: They are essential for the functionality of night vision equipment.
- F-35 Fighter Jets and Submarines: They are used in the construction and operation of these advanced military systems.
4. Medical Applications:
- MRI Scanners: Rare earth elements are used in the powerful magnets within MRI machines for medical imaging.
- Cancer Treatments: Some rare earth elements have applications in cancer treatment.
5. Other Applications:
- Catalytic Converters: They are used in catalytic converters in vehicles to reduce harmful emissions.
- Optical Glass: Some rare earth elements are used in the production of optical glass for camera lenses and other applications.
- Polishing Powders: They are used in the polishing of semiconductors.
- Oil Refining: Certain rare earth elements play a role in oil refining processes.
- Nuclear Power: They are used in nuclear power applications.
The supply chain issues facing Canada presently, can be rectified through a joint venture with the US which has distribution supply chains to many nations . A comprehensive supply chain analysis conducted by Industry Canada revealed that 87% of rare earth inputs used in Canadian manufacturing originate from Chinese sources, either directly or indirectly. This dependency creates multi-layered risks:
- Price volatility: Sudden cost increases cannot always be passed to consumers
- Supply interruption: Production disruptions due to delayed shipments
- Quality control: Variable specifications affecting final product performance
- Future design limitations: Constraints on innovation due to material uncertainty
Canadian resources contain both light and heavy rare earth elements in economically viable concentrations. This balance is crucial, as heavy REEs like dysprosium and terbium command higher market prices and face more severe supply constraints. Quebec’s Strange Lake and Thor Lake deposits contain some of North America’s richest concentrations of both light and heavy REEs, with estimated grades between 1.3-1.8% total rare earth oxides (TREO). In Labrador, the Kipawa and Ashram projects represent significant potential with established infrastructure connections. The Northwest Territories’ Nechalacho project stands out with an estimated 49 million tonnes of rare earth-bearing resources grading 1.7% TREO.
Mutual Benefits of US-Canada Partnership
There are strong mutual benefits if a US company set up a processing plant in Canada, given global supply chain vulnerabilities and the dominance of China in rare earth processing:
- Supply Security: Both countries would benefit from a more reliable supply of critical minerals for defense and high-tech industries, reducing dependence on China.
- Revenue and Resource Sharing: US investment could unlock Canadian mineral reserves, and joint ventures would create revenue-sharing opportunities and guaranteed access to critical REEs needed for the US electronics and defence sectors.
- Technology Transfer: Partnership would facilitate transfer of processing and extraction technologies and could allow for collaborative R&D.
- Sustainability: Canada places emphasis on environmentally responsible mining and processing, enhancing the brand value of ethically sourced, “clean” rare earths.
- Government Support and Incentives:
- Utilize accelerated permitting (“Strategic Resources Fast Track”) in Canada to cut project timelines from 7-10 years to 3-5 years for strategic minerals.
- Apply for incentives from the Canadian Critical Minerals Fund and US Defense Production Act investments.
- Joint Venture Agreements:
- Draft clear agreements for revenue-sharing, mineral allocation, and offtake rights to guarantee supplies for both parties.
- Technology Exchange:
- Negotiate terms for technology sharing—especially around advanced separation and magnet manufacturing processes.
- Infrastructure Planning:
- Leverage Canada’s newly built and planned integrated processing facilities in Saskatchewan, Quebec, and Ontario for quick setup; consider location near key deposits or established transport corridors.
- Environmental and Community Engagement:
- Follow Canadian requirements for best-in-class emissions and waste management; secure “social license” by consulting local stakeholders.
- Political Coordination:
- Address trade tensions and tariffs—removal or easing can speed up cross-border investments and partnerships.
- Seek high-level political commitment recognizing rare earths as a matter of national security for both nations.
Such a collaboration could enable North America to capture up to 20% of the regional magnet market by 2030, supporting defense, renewables, and tech industries with secure, ethical supply
Leading Canadian companies in rare earth mineral extraction and processing as of 2025 include:
- Saskatchewan Research Council (SRC): SRC is building and operating Canada’s first fully integrated rare earth processing facility in Saskatchewan, with funding from the Government of Saskatchewan. This plant is expected to be one of the most environmentally sustainable rare earth processing operations globally, producing high-value REEs and magnet metals through hydrometallurgy, separation, and metal smelting.
- Mkango Resources (TSXV:MKA): Mkango is emerging as a leader in rare earth recycling and processing, with global assets and partnerships focused on recycled rare earth magnets, alloys, and oxides. The company is heavily involved in research and technology for circular rare earth supply, both in North America and internationally.
- Ucore Rare Metals (TSXV:UCU): Ucore is advancing proprietary separation technologies (RapidSX) and operates projects in both the US and Canada. The company is developing commercial-scale refining facilities to produce high-purity rare earth oxides, and received significant government support to scale up operations in Ontario.
- Leading Edge Materials (TSXV:LEM): Leading Edge focuses on the development and supply of critical raw materials, including REEs. While its mining assets are mainly in Europe, it is recognized among the top Canadian-listed REE firms for its performance and ongoing technical collaborations.
These companies are at the forefront of establishing a vertically integrated, environmentally responsible rare earth supply chain for North America
To establish a baseline for an across-the-board joint venture between Canada and the US for mining and processing all rare earth minerals possessed by Canada, several economic requirements and benefits should be considered:
Baseline Economic Requirements
1. Capital Investment
- Large-scale financing is needed for exploration, mine development, infrastructure (roads, energy, water), mining operations, processing plants, and distribution networks. Recent US investments exceed $70million under the Defense Production Act for Canadian minerals projects.
- Patient capital is necessary for supporting greenfield mining and processing, with decades-long payback horizons typical for mineral projects.
2. Processing and Technology
- Building and scaling modern processing facilities is essential, given the limited current separation capacity outside China. Canada is home to North America’s only commercial-scale rare earth processing facility (SRC in Saskatchewan), which uses advanced automation and AI for cost-competitive refining.
- Transfer of technical know-how, joint R&D, and intellectual property agreements will be required for efficient separation and purification of complex rare earths.
3. Regulatory and Environmental Compliance
- Joint ventures would need to meet strict environmental standards, secure permits, and prioritize community and Indigenous relations. Environmental safeguards and reliable energy supply are critical for sustainable operations.
- An equivalent to the US Defense Production Act in Canada—targeting defense-critical minerals—would incentivize Canadian projects.
4. Supply Chain and Market Commitments
- Secure long-term offtake agreements from US defense, tech, and automotive industries (with federal support) to underwrite demand for Canadian rare earths.
- Incentives (tax credits, grants, low-interest loans) and supportive regulatory environments in both countries, possibly prioritizing locations with strong infrastructure and mining-friendly laws.
5. Mineral Coverage
- The 34 critical minerals identified by Canada include rare earth elements (e.g., neodymium, praseodymium), cobalt, lithium, nickel, graphite, platinum group metals, gallium, and uranium—many of which are strategically vital for energy, defense, and technology.
Benefits to Canada
- Economic Growth: New mining projects create high-paying local jobs, stimulate regional economies, and encourage industrial development.
- Technology Leadership: Canadian expertise in automation and separation technology can be leveraged and exported, enhancing domestic capacity and global competitiveness.
- Supply Chain Security: By diversifying away from Chinese supply chains, Canada strengthens its own mineral independence and supports North American resilience against geopolitical disruptions.
- Strategic Alliances: Deeper industrial ties with the US can improve defense collaboration and solidify Canada’s role as a preferred supplier for critical minerals, positioning the country as a technological and industrial leader.
- Investment Flows: Attraction of additional US and international investments through favorable regulatory, legal, and political agreements that guarantee long-term project viability.
- Environmental and Social Responsibility: Canadian regulation and community engagement models may set high standards for ESG performance, which can boost market reputation and meet growing investor demand for responsible sourcing.
An ambitious Canada-US joint venture for rare earth mining and processing demands billions in investment, advanced processing technology, robust regulatory frameworks, and secure market demand. For Canada, the benefits are far-reaching—job creation, technology advancement, supply chain stability, and international prestige—potentially making it a cornerstone of the North American and global critical minerals ecosystem.
Jeffrey Newman is a whistleblower lawyer representing whistleblowers in export controls and other types of whistleblower cases. His website is www.JeffNewmanLaw.com .
He can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
