Highlights
- The CSIS report warns that China’s near-monopoly on critical minerals poses a significant national security risk to the U.S. defense industrial base.
- Five key strategic minerals are critically dependent on Chinese supply chains:
- Gallium
- Niobium
- Rare Earth Elements
- Cobalt
- Tungsten
- The authors propose a comprehensive U.S.-Canada mineral strategy, including:
- Trade negotiations
- Public-private stockpiling
- Rapid mine permitting
- The strategy aims to reduce geopolitical vulnerabilities.
Christopher Hernandez-Roy, Henry Ziemer, and Alejandra Toro all affiliated with the Center for Strategic and International Studies (CSIS) report (opens in a new tab) on a call to action in its latest report, Mining for Defense: Unlocking the Potential for U.S.-Canada Collaboration on Critical Minerals. The authors argue that China’s near-monopoly over key critical minerals poses an unacceptable national security risk to the U.S. defense industrial base. With rising geopolitical tensions—particularly with the so-called “Axis of Upheaval” (China, Russia, Iran, and North Korea)—the U.S. and Canada, the authors express, must urgently scale up cooperation to secure reliable and domestic mineral supply chains. The report contends that Canada, given its vast reserves and established mining sector, can be a natural alternative to China’s dominance, ensuring North American defense and economic security. But lots of questions are not covered.
So, what are the points the authors make backing their proposition? First, the authors imply that a prewar global landscape necessitates an industrial response. The authors compare the current global environment to the pre-WWII era, where economic and military preparations were critical. They highlight that the U.S. is woefully unprepared for a conflict with China over Taiwan, citing CSIS wargames that show the U.S. could run out of key weapons like long-range precision munitions in under a week. Experts have informed Rare Earth Exchanges that with a complete ban, U.S. production would start grinding to a halt within 90 days.
Importantly, the authors remind the reader that Canada played a pivotal role in WWII, supplying the U.S. with aluminum, nickel, lead, and uranium. The report suggests history should repeat itself through a U.S.-Canada strategic minerals alliance.
What are Five Strategi Minerals in Canada?
Listed below are the five minerals critical to U.S. defense technology that China either dominates or strongly influences:
| Mineral/Element | Summary |
|---|---|
| Gallium (used in semiconductors, radars, and electronic warfare) | China produces 98% of global supply; Canada has emerging capacity through Neo Performance Materials and Rio Tinto. |
| Niobium (essential for hypersonic weapons, armor plating, and jet engines) | Canada is the second-largest producer after Brazil, where China has a strategic stake in key mines. |
| Rare Earth Elements (REEs) (used in missiles, targeting systems, and EVs) | 85% of global refining happens in China; Canada’s new Saskatchewan Rare Earth Processing Facility could be a game-changer. |
| Cobalt (for batteries, jet engines, and magnets) | China controls 80% of the world’s cobalt refining capacity, mostly through mining assets in the Democratic Republic of Congo (DRC). Canada has untapped reserves but lacks refining capacity. |
| Tungsten (for armor-penetrating munitions, rocket nozzles, and balance weights) | China controls 85% of global production; Canada’s Mactung Project in Yukon could be the Western alternative. |
Problematic Bottlenecks—the Supply China
The authors argue that mining alone is not enough—the entire processing, refining, and recycling ecosystem must be built.
They propose a U.S.-Canada Critical Minerals Chapter in USMCA trade renegotiations, a Canadian equivalent to the U.S. Defense Production Act (DPA) Title III, and public-private stockpiling incentives to mitigate supply disruptions. Regulatory roadblocks are a major issue: it takes an average of 27 years to permit a mine in Canada, making it nearly impossible to scale quickly in response to geopolitical threats.
Rare Earth Exchanges Review
A CSIS analysis review reveals unaddressed issues and alternative scenarios not contemplated. Despite the report’s strong case for North American self-reliance, several critical issues are overlooked for example.
The first somewhat provocative question we must ask: is the U.S. actually willing to reduce dependence on China? While Washington has been vocal about the need to de-risk from China, the U.S. continues to rely heavily on rare earth processing, even sending U.S.-mined materials to China for refining.
Frankly, does the U.S. have the political will to subsidize and scale North American alternatives rapidly, or will cost and convenience keep Chinese supply chains dominant?
What’s Canada’s ability to deliver on promises? The report assumes that Canada will be an immediate and scalable alternative. However, Canada’s mining sector has seen projects stall due to environmental opposition, regulatory red tape, and Indigenous land disputes. If projects like the Mactung tungsten mine or the Fortune Minerals cobalt refinery don’t move forward, will the U.S. still have a fallback option?
What about the prospect of China weaponizing its’ mineral dominance as part of some form of retaliation?
China has already imposed export restrictions on gallium, germanium, and rare earths—what happens if it escalates its mineral warfare, cutting off the U.S. and its allies entirely? Could Beijing flood the market with cheap minerals to bankrupt Western mining efforts, only to jack up prices once alternatives fail?
Will Canada prioritize U.S. defense needs over Green Energy? Talk of Canada as the 51st state probably does not help the American cause. The U.S. defense industry requires massive amounts of REEs, cobalt, and tungsten, but so does Canada’s green energy transition. If Canada is forced to choose between supplying EV battery factories or U.S. missile systems, which will it prioritize?
Final Thoughts
The CSIS report strongly advocates urgent U.S.-Canada cooperation on critical minerals, but the execution challenges are immense. While historical precedents suggest Canada could step up as it did in WWII, today’s reality is far more complicated—with Chinese economic retaliation, Canadian regulatory obstacles, and uncertain U.S. commitment all posing serious risks to the plan.
The key question remains for Rare Earth Exchanges: Will North America take decisive action to secure its supply chains, or will political hesitation, bureaucratic delays, and a frankly lack of deep-informed wisdom on the topic leave the U.S. defense industry vulnerable to Chinese coercion?
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