Canada’s Rare Earth Moment – As China Wavers, Ottawa Must Step Up

Highlights

• China currently controls 67% of global rare earth mine production and 99% of heavy rare earth processing.
• Canada has 12 mining projects, 3 processing facilities, and 2 recycling plants in development to become a strategic Western REE supplier.
• To compete, Canada must accelerate government investment, secure offtake agreements, and integrate with U.S. and NATO supply chains.

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Canada stands at a critical inflection point in the global rare earth race. RBC’s latest report (opens in a new tab) lays bare seven striking figures that highlight not only China’s overwhelming control of rare earth elements (REEs), but also Canada’s untapped potential as a strategic Western supplier.

With 67% of global REE mine production and 99% of heavy rare earth (HREE) processing under Beijing’s control, China’s grip remains unmatched. Meanwhile, the U.S. has poured over $439 million into shoring up its domestic REE capacity since 2020, but it still lacks downstream processing and relies on exports to China for refinement.

Rare Earth Exchanges has commented on Canada’s criticality as a U.S. partner, raising concerns about unneeded tariff trade war tensions.

In April, Beijing escalated tensions by banning REE exports to 16 U.S. defense-linked entities, reaffirming rare earths as geopolitical leverage. Although China has since signaled a possible walkback of restrictions after trade talks, the message is clear: dependence equals vulnerability.

Canada—recognized under the U.S. Defense Production Act as a domestic source—has seen only $22 million in U.S. investment since 2023. Yet 12 Canadian mining projects, 3 processing facilities, and 2 recycling plants are in development. With no current domestic production, the window to act is rapidly narrowing.

To seize this moment, Canada must:

• Accelerate government investment to de-risk projects and scale commercial processing;
• Secure guaranteed offtake agreements to compete with China’s subsidized pricing;
• Leverage its DPA alignment to deepen integration with U.S. and NATO supply chains.

China controls 92% of REE magnet production. Canada has the potential to become a Western anchor—but only if it moves from pilot to production.