Forging the Critical Minerals Alliance -Why the U.S. Needs Toronto, London, and Perth to Win the Resource Race

Highlights

• Toronto, London, and Perth dominate the global critical minerals market, with China controlling most midstream processing and downstream manufacturing.
• A proposed four-nation alliance between the US, Canada, the UK, and Australia could create a resilient alternative to China-controlled mineral supply chains.
• Strategic collaboration would involve:
  • Joint investments
  • R&D networks
  • Coordinated efforts to develop upstream mining, midstream processing, and downstream manufacturing capabilities

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Demand for critical minerals – from lithium and nickel for batteries to rare earth elements for magnets and defense electronics – is surging worldwide. The U.S. is racing to build domestic supply chains for these minerals in order to meet climate goals and shore up national security. But the specialized expertise, companies, and financing needed to explore, develop, and finance these projects are disproportionately concentrated outside the U.S., in three financial and mining hubs: Toronto (Canada), Perth (Australia), and London (UK). Toronto alone hosts nearly 40% of the world’s publicly traded mining and exploration firms. Toronto-based issuers raised $43 billion in the past five years (roughly 47% of all global mining financings) according to the Toronto Stock Exchange (TSX). London and the UK similarly house a deep bench of mining engineers, corporate headquarters, and equity markets, historically earning London’s claim as the “premier global hub” of mining finance. Perth (through Australia’s ASX exchange and nearby resource-rich regions) likewise connects global investors with upstream mine projects across the Pacific.

These cities form the backbone of upstream mining finance and expertise. All three have an ecosystem of investment banks, mining engineers, geologists, and legal and accounting specialists focused on minerals. For example, Canada’s mining policy “offers significant incentives” and legal frameworks that have attracted companies to list in Toronto, giving it roughly 40% of the world’s publicly listed mining companies, as cited above.

As an international financial center, London remains home to many major mining firms and analysts, and is still seen as a “dealmaker” for resource projects. Australia – leveraging Perth as its de facto mining capital – contributes large project developers and exploration firms (notably lithium, rare earths, copper, and uranium).

In short, exploration, project finance, and mine development are largely driven by companies in Toronto, London, and Perth; U.S. policymakers and investors should treat these cities as partner gateways, not bystanders.

Chinese Dominance in Midstream Processing

Once ores are mined, however, the processing (“midstream”) of many critical minerals is heavily dominated by China. In particular, China processes the bulk of the world’s rare earths and refines or chemically converts most of the cobalt, lithium, graphite, and other battery-related minerals mined globally. For example, a recent U.S. government analysis shows that China produces or refines the vast majority of key energy-transition metals: in 2023 China accounted for 44% of refined copper, 77% of refined cobalt, 65% of lithium, 91% of natural graphite, and a striking 92% of rare-earth-element output (by value (opens in a new tab)). Likewise, USGS data report that about 70% of U.S. imports of rare-earth compounds and metals come from China, meaning U.S. automakers and electronics companies rely on China for purified rare earths. This concentration creates glaring vulnerabilities. China has leveraged its processing monopoly as a geopolitical tool (for example, past export controls on rare earths).

Breaking this dependence requires Western capacity to do the midstream steps – from acid leaching and solvent extraction to metal/alloy refining – that China currently does. It also demands mining metallurgists, chemists, and engineers. Critics note that much of this technical talent is in China, so Western industries must “poach or adapt” Chinese processing know-how. Indeed, some of Canada’s top critical-mineral projects (like the NICO cobalt-bismuth-copper refinery) are explicitly seeking U.S. engineering partners to build new refineries, partly to replace lost Chinese sources. Developing and sharing processing expertise among allies will be vital. For example, joint R&D initiatives – linking universities and labs in the U.S., Canada, the UK, and Australia – could train the workforce and refine leaching and separation technologies outside China’s reach.

Downstream Manufacturing: Magnets and Beyond

Even farther down the value chain, China still makes most of the world’s finished critical products, especially permanent magnets for EV motors and wind turbines. The U.S. Department of Energy estimates that China produces about 90% of global rare-earth magnet output (the rest comes mainly from Japan and a few other Asian firms). Consequently, even if mines are developed and oxides produced in the U.S. or allied countries, end-use goods like high-performance magnets are mostly imported from Chinese firms. Emerging magnet factories in the West are tiny by comparison.

As Rare Earth Exchanges (REEx) reports, rare-earth magnet production is overwhelmingly centered in China, with only a handful of new facilities planned in allied countries. However, signs of diversification are appearing. In 2023–2024, the U.S. and its partners announced dozens of projects to build magnet factories or expand rare-earth refining in America, Europe, and Japan. For example, U.S. investments support E-VAC Magnetics (opens in a new tab) (a U.S. spinoff of Germany’s VAC Group) in a South Carolina magnet plant. MP Materials (opens in a new tab) in Texas intends to add domestic magnet-making. The UK’s GKN Powder Metallurgy (opens in a new tab) (a now-UK-listed firm) is also ramping up sintered magnet lines, supported by U.S. DoD grants. Elsewhere, German and Japanese companies have quietly grown capacity in bonded and injection-molded magnets for EVs and robotics, while South Korea’s magnet firms (aligned with autos) continue development. In short, “pockets of growth” outside China exist – but they need scale-up. The four-nation alliance should coordinate investments and skills development in these downstream sectors as a strategic priority.

Current Collaborations and Initiatives

Some alliance-building is already underway, illustrating how U.S., Canadian, Australian, and British efforts can synergize. The U.S. and Canada have begun co-financing projects in North America to kickstart supply chains. 2024 for instance, the U.S. Department of Defense announced a grant (opens in a new tab) (~$6.4 million) to Canada’s Fortune Minerals to advance the NICO project (a cobalt-nickel-copper-bismuth-gold mine and refinery in Canada). This funding (under the DPA Title III program) aims to secure North American cobalt supplies for batteries. Canada’s Critical Minerals Strategy report explicitly highlights this partnership and another joint investment in a Quebec graphite project. These examples show the power of aligning U.S. clean-energy funds (like the IRA) with Canadian ore projects.

Across the Pacific, the U.S. and Australia formalized a Climate and Critical Minerals Compact (opens in a new tab) in May 2023. Under that framework, senior officials have pledged to coordinate clean-energy and minerals policies and investments, aiming to “diversify responsible clean energy and critical minerals supply chains” between the two countries. Of course, Biden is out and Donald Trump is in, who has intensified America’s push for rare earth metal and critical mineral resilience via executive orders and a 232 action. Trump’s initial trade war was perhaps not the proper way to commence an alliance with Toronto, London, and Perth, key cities in the mining sphere, per the hypothesis of this paper.

Australia and the UK signed a Joint Statement on Critical Minerals in 2023, committing to “build diverse, resilient and sustainable supply chains.” That declaration explicitly notes each country’s strengths—Australia’s vast mineral reserves, growing processing plants, and the UK’s global mining finance role and engineering sector—and sets shared goals for investment and downstream capacity. Australia just announced a $1.2 billion critical mineral stockpile effort.

On the trade front, U.S. and UK officials negotiated a bilateral critical-minerals agreement (opens in a new tab) in 2023 that could allow British-made battery materials to qualify for U.S. EV tax credits.

Ambassador Katherine Tai reported “significant progress” on this deal in late 2023 – a sign that even trade policy is being harmonized to link the UK into North American clean-energy supply chains. (Canada’s participation is logical since it is already within NAFTA/USMCA and part of the North American security perimeter.). Collectively, these nascent initiatives hint at a broader coalition. The Minerals Security Partnership (launched in 2022 by the U.S., Japan, and Canada, now including 14 countries) already provides a forum for allied governments to exchange best practices on mining and recycling.

A formal U.S.-Canada-UK-Australia alliance could leverage this foundation but go much further, for example, by creating joint funding mechanisms, shared R&D centers, and regularly scheduled ministers’ meetings. How President Trump’s moves will impact all of the above remains to be seen. One thing is for sure—our sources inform REEx that Trump’s administration is taking the matter of critical mineral and rare earth element resilience very seriously.

Building a Formal Four-Nation Critical-Minerals Alliance

Given the strategic stakes, ad hoc projects are not enough. The U.S. needs a cohesive, sustained alliance with Canada, Australia, and the UK (sometimes dubbed the “CANZUK” or “Five Eyes minus NZ” grouping) specifically tailored to critical minerals. Such an alliance could mirror frameworks like AUKUS (for defense) (opens in a new tab) or the Clean Energy Ministerial, but focus on minerals.

Key elements include joint investment funds or loan guarantees for projects in alliance countries (e.g., U.S.-backed loans to a Canadian lithium mine or British battery recycler), unified investment screening to prioritize allied-owned projects, and streamlined permitting coordination. On the technical side, an R&D network could pool universities and labs (for example, West Australian extractive tech centers linking with Canadian metallurgical institutes). Workforce development could also be joint: mining and engineering schools in Toronto, Perth, and London could exchange curricula and student programs with U.S. institutions.

Geopolitically, this alliance would reinforce supply chain resilience. Locking in finance and governance standards (ESG, permitting, labor rules) among trusted partners would create an alternative to Chinese-dominated supply chains. It would send a clear signal for industry: projects affiliated with these hubs will benefit from assured markets and government support. For policymakers, it would distribute the burden of “de-risking” critical minerals across allies.

Economically, a formal alliance promises larger-scale deployment of Western capital. Canadian, Australian, and UK pension funds and banks are major mining backers; a closer alliance could facilitate cross-border investment (for instance, an Australian fund investing in a U.S. rare-earth plant in partnership with a UK trading firm). This also helps American firms, which often lack in-house exploration teams, to tap mining opportunities through trusted partners in Toronto or Perth. In short, the alliance would make supply chains more competitive by leveraging the global hubs of mining finance and expertise outside China.

Final Thoughts

Securing critical minerals is too important to leave to the market alone—it demands coordinated geopolitics. Nationalism won’t cut the mustard, even if driven by the USA’s market clout. Its business class lacks the financial and business pedigree necessary to accelerate resilience across supply chains. Could it catch up? Certainly, it will be over time. But is there time?

The U.S. can access the upstream know-how and finance it needs by formally aligning with Canada, Australia, and the UK (each anchored by Toronto, Perth, and London). In tandem, the alliance can invest in new midstream and downstream capacity, drawing on the combined ingenuity of all four countries. The result would be a more secure, diversified supply chain for batteries, magnets, and other strategic materials – bolstering economic security, creating high-skill jobs, and countering China’s dominance. Recent steps (joint investments, compacts, and trade negotiations) show the path forward; Trump’s executive orders create imminence and urgency– now is the time to cement them into an enduring multilateral critical-minerals alliance that Trump must comprehend, embrace, and engage.