Rare Earth Exchanges

Canada Explores Rare Earths for Semiconductor and EV Industries

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Highlights

  • Canada is positioning itself as a potential key player in the semiconductor and electric vehicle industries by developing its rare earth minerals sector.
  • Despite challenges like long mining timelines and complex processing, Canada has promising projects like Nechalacho and Crawford Nickel Sulfide Project.
  • Geopolitical tensions are driving global competition for critical minerals, with Canada seeking to provide alternative supply sources to China-dominated markets.

Canada is positioning itself as a key player in the global semiconductor and electric vehicle (EV) industries through strategic development of its rare earth minerals sector. The recently released Canadian Critical Minerals Strategy Annual Report 2024 (opens in a new tab) outlines the country’s progress and future plans, emphasizing policy development and research initiatives led by Natural Resources Canada’s Critical Minerals Centre of Excellence (CMCE). These efforts aim to strengthen Canada’s presence in the semiconductor supply chain by prioritizing projects focused on producing high-purity materials and components for advanced technologies. On December 31, 2024, EE Times offered an overview (opens in a new tab) of Canada’s quest for REEs, which provides some key insights.

Ambitious Goals for Critical Minerals

The Canadian government has identified opportunities to expand its semiconductor value chain, targeting critical inputs like sensors, microelectromechanical systems (MEMS), compound semiconductors, and advanced materials processing. These initiatives aim to cater to industries heavily reliant on semiconductors, such as automotive, aerospace, and defense. However, the feasibility of Canada becoming a significant supplier of critical minerals remains contentious.

Skepticism About Canada’s Role

Gordon Harling, (opens in a new tab) CEO of CMC Microsystems, cautioned against overestimating Canada’s potential in this arena. He highlighted the long lead times and environmental challenges associated with mining. “It typically takes 10 to 15 years to start a new mine project,” Harling noted, emphasizing that this timeline may render Canada’s contributions to the EV battery market too late.

Harling also pointed out that Canada lacks semiconductor fabrication facilities requiring rare earths and that refining processes for these materials are cost-intensive and complex. While some critical metals can be extracted from mining by-products, large-scale processing might still need to occur in established markets like the U.S. or China.

Rare Earth Projects Underway

Despite these challenges, Canada has promising projects in development. The Nechalacho project, for example, aims to produce 5,000 tons of rare earth oxides annually by 2025. While modest compared to China’s output, this project represents a significant step for Canada. Additionally, Canada is investing in nickel production for EV batteries. Projects like the Crawford Nickel Sulfide Project are poised to double Canada’s share of global nickel production between 2025 and 2035.

Geopolitical Implications

The global race for critical minerals has intensified amid geopolitical tensions. Derek Lemke of Exiger highlighted the “weaponization of the periodic table,” where nations seek to reduce dependency on China for materials like germanium, gallium, and antimony. Canada’s mineral reserves could provide alternatives, but current extraction and processing capabilities remain limited.

Environmental and Technological Hurdles

Michael Chan, a researcher at Toronto Metropolitan University (TMU), underscored the environmental and technological challenges in extracting rare earth elements. While these elements are not rare in nature, their extraction is energy-intensive and environmentally taxing. Chan’s team is developing advanced absorbent technologies to recover elements like lanthanum from mining waste, a promising but still nascent solution.

The Path Forward

Canada’s success in becoming a critical minerals hub will depend on continued innovation, streamlined regulatory processes, and partnerships with industry stakeholders. As global demand for rare earth elements grows, Canada has an opportunity to carve out a niche—but only if it can address the significant technical, environmental, and economic barriers that lie ahead. In the bigger scheme of things, Rare Earth Exchanges has suggested that the West may need to employ the use of state-backed structures to help private industry gain collective momentum on China’s control over the overall sector.

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